2022 in review
In 2022, the leveraged finance market saw one of the largest contractions in high-yield bond offerings and leveraged loans in over a decade.
Trend highlights include:
- Global transactional activity dropped to its lowest since the 2008 financial crisis across the board, with international capital markets effectively closed to new issuance in Europe for the longest period on record (including following the 2008 financial crisis).
- Market participants turned to alternative sources of funding as traditional international capital markets remained mainly closed, such as private debt or bespoke local solutions to meet their financing needs.
- ESG continues to be a main area of focus as borrowers continue to enhance their reporting and regulators their scrutiny.
- The use of DLT based technology in debt capital markets continued to grow with a number of landmark digital bonds issuances coming to market as the year progressed.
- Product mix between high-yield and Term Loan B borrowings remained in line with past trends, with high-yield bonds contracting the most (both in terms of value and volume).
- Term Loan A (i.e., amortizing) also resurfaced in certain discussions as a potential source of capital and in some cases a desire for more traditional protections for lenders.
- In comparison to 2021, M&A continued to be the main transactional driver in the market, despite the drops in financing activity.
Ten predictions to shape 2023
Find out how the EMEA leveraged finance market will respond to one of the largest contractions in the high-yield bond and leveraged loans market in over a decade, less supply in sources of funding and the continued focus on ESG factors.
You'll also find predictions on ESG performance reporting, the effect of rising interest rates, its impact on the real estate financing market, and more.
To read more from our 'In the know' series please click here.