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Marina Lukatsky

Senior Director/Head of LCD Research

Marina manages research content for LCD. She joined in 1999 as an analyst and has held various analytical and management roles on the LCD research team. Marina is responsible for developing analytics and commentary detailing trends in the global leveraged finance market. She also contributes commentary to LCD News on loan index performance, recovery rates, market technicals and other trends.

ARTICLES BY CURRENT AUTHOR

LBO

LBO green shoots emerge as credit spreads fall to post-crisis lows

The market momentum is encouraging, though buyout activity remains far below historical levels due to the elevated cost of debt and the logjam in sponsor exit activity.

Leveraged loans return 2.46% in Q1 as investor risk appetite grows

Measurable demand for loans ballooned to the highest level since the Fed started hiking rates, widening the year-to-date supply shortage to over $61.5 billion.

As markets rally, US leveraged loan activity roars in Q1

Leveraged loan activity totaled a whopping $314 billion in 2024’s first quarter, the most in three years, according to PitchBook LCD.

How big is the US leveraged loan repricing opportunity?

The repricing runway could extend to another $100 billion, assuming spreads remain at current levels and secondary prices continue on their current trajectory.

Banks eye low-rated refinancings to claw back business lost to private credit

Based on PitchBook LCD data, 21 companies have issued a broadly syndicated loan so far this year to refinance $8.3 billion of debt previously provided by direct lenders.

Riskier borrowers act fast as leveraged loan market opens for refinancing

An opening in the syndicated loan market has drawn lower-quality issuers as well as private credit borrowers looking to cut interest costs.

With optimism rising and credit spreads falling, riskier loan borrowers rush to reprice

Riskier debt issuers are taking advantage of improved market sentiment to slash borrowing costs, often on deals put in place less than a year ago.

US leveraged loans post whopping 2023 returns as asset class shrinks amid LBO drought

The impressive performance comes as Wall Street banks fight over market share with a rapacious private credit sector.

November Wrap: Leveraged loans gain 1.22%; YTD 11.48% return is best since 2009

Loans have gained close to or above 1% in seven of the last 11 months, with only three months in the red. As a result, loans were up 11.48% in 2023, through November.

Leveraged loan ‘Weakest Links’ soar as investors eye default picture

The ranks of US leveraged loan Weakest Links - a demonstrated indicator of future potential default activity - increased for a fifth consecutive quarter in September.

After Hyland, which huge leveraged loan will private credit target next?

Hyland is the latest example of private credit swooping in to refinance a huge debt issue originally led by Wall Street Banks. There could be more of this activity soon.

US Leveraged Loan Wrap: Market rally continues as returns soar, dividends emerge

August was another strong month for the leveraged loan asset class, as the market returned 1.17%, putting it on pace for its best year since the Global Financial Crisis.

US leveraged loan Weakest Links increase in Q2 as rising rates take their toll

The count of US leveraged loan Weakest Links increased for a fourth consecutive quarter in June, as leveraged borrowers grapple with costlier financing terms.

Leveraged loans outperforming other fixed-income classes in strongest year since GFC

The $1.4 trillion U.S. leveraged loan market extended its rally in July, returning a solid 1.3% and opening the door to ‘opportunistic’ transactions, such as PE dividends and repricings.

June US Leveraged Loan Market Wrap: Returns soar as rates rise, though trouble spots abound

Against a challenging backdrop the US leveraged loan asset class has performed well in 2023. It will have to navigate choppy waters during the remainder of the year, however.

US leveraged loans dip into the red in May; net supply remains elusive

After rallying in April, the US secondary loan market retreated in May, as the Morningstar LSTA US Leveraged Loan Index lost 0.18%, its worst performance in eight months.

Interest coverage: How are pre-rate-hike LBOs faring in today’s costlier markets?

As interest costs have risen on floating-rate debt, interest-coverage ratios for existing LBO loans have declined, and could fall further should economic headwinds persist.

European leveraged loans rally, boosting returns to post-GFC high

The Morningstar European Leveraged Loan Index (ELLI) had a strong April, boosting the year-to-date return to 5.26% — the best for any comparable period since the Global Financial Crisis.

With LBOs scarce, leverage in syndicated US loan market sinks to 7-year low

While US leveraged loans now entail less debt, interest coverage for these borrowers has dipped starkly as borrowing costs have skyrocketed, thanks to rising rates.

Who’s borrowing from SVB: Bank’s collapse puts spotlight on loans to tech industry

The collapse of Silicon Valley Bank is raising questions about lending to the tech sector, which has had a growing presence in both the institutional syndicated loan market and the private credit market in recent years.

US leveraged loans return 0.58% in February as riskiest names outperform

Despite late-month volatility the U.S. leveraged loan asset class showed positive returns in February, with loan investors like CLOs demonstrating increased appetite for risk.

Leveraged loan financing for LBOs deteriorates as cost of debt rises

The economic turmoil in the capital markets did not bode well for private equity dealmaking in the third quarter. US companies raised just $10.6 billion of leveraged loans to fund buyouts in the three months, the lowest such reading in almost seven years. The drop-off is even more stark when compared to 3Q21, when LBO volume was as high as it had been since the Global Financial Crisis.

US leveraged loans lose 2.27% in Sept.; on track for worst year since 2008

The Morningstar LSTA US Leveraged Loan Index lost 2.27% last month, and is now down 3.25% for the year, ranking 2022 at present as the worst year since the Global Financial Crisis.

Quick take: Amid hunt for yield, B-minus loans add to record market share

A riskier segment of the U.S. leveraged loan asset class continues to gain market share, and might soon outweigh better-rated issuers for the first time.

With recent surge, YTD US leveraged loan returns edge into positive territory

Since mid-March, secondary loan prices have rebounded strongly—the index gained 2.25% between March 16 and April 4.

February Wrap: Volatility hits loan market, dragging YTD returns into the red

The S&P/LSTA Leveraged Loan Index fell 0.51% in February, while the LL100 Index lost 0.54%. For both, it was the worst performance since March 2020.

Sofr replaces Libor as 98% of new loans are tied to alternate base rate

A full 98% of leveraged loans launched in January were priced over the secured overnight financing rate, accounting for $63.4 billion of supply, up from 15% ($13.3 billion) in Q4 2021.