Tue, Oct 25, 2022
We recently concluded our bi-annual mid-market deal survey covering H1 2022 in which more than 50 leading banks, credit funds and asset-based lenders participated, submitting deals completed in H1. Key trends witnessed are summarized below but we note that we have seen a significant increase in market volatility over the last few months, so trends seen in H1 are not representative for expectations for H2 and we refer to the Market Outlook comments.
The major findings of our survey were:
Over the last few months, we have been witnessing increased levels of market volatility and uncertainty. The debt mid-markets are typically less volatile than the syndicated (large cap) markets and we expect the mid-markets to remain open. However, we do expect that deal making will slow down significantly in H2, resulting in reduced deal activity, compared to the record breaking H2 of 2021, as well as an increase in restructurings and (di)stressed refinancings.
Concerns about spiraling inflation and rising costs of debt, combined with ongoing supply chain pressures and high systemic levels of leverage are mounting. We expect lenders to proceed with an increased level of caution and credit scrutiny, requiring high levels of conviction before proceeding with new lending. Several fund lenders that are also active in large cap markets have increased their loan pricing to match yields available in the large cap markets.
To read the entire report please contact Jacco Bouwer, Andreas Stoecklin or Howard P. Lanser.
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