Leveraged loan issuance in the U.S. slowed dramatically this week as investors continued to chew over credits already brought to market and issuers tinkered with deals. Volume slid to $5.1 billion via seven new issues, from a healthy $20 billion the previous week, according to S&P Capital IQ/LCD.
With this week’s activity, year to date leveraged loan issuance in the U.S. now totals $451 billion, down from $476 billion during the same period in 2013. For September, loan volume is rebounding to normal levels after a particularly dismal August. Through yesterday there has been $52 billion in U.S. issuance in September,, compared to only $15 billion the previous month (the August number was the lowest since September 2011).
There was little to choose from this week as far as notable deal launches. Probably the highest-profile issuer was for Metaldyne Performance Group, an automotive concern controlled by private equity concern American Securities Capital. The company this week unveiled $1.5 billion in loans backing a refinancing/IPO.
More telling: How deals already in market are faring.
“When accounts get comfortable with a story or see an attractive mix of pricing and ratings, they’re still piling into deals, albeit selectively,” says LCD’s Chris Donnelly. For instance, accounts got behind a $6.75 billion institutional tranche backing Burger King’s merger with Tim Hortons after arrangers made some investor-friendly revisions in what remains a choppy leveraged loan mart.