European leveraged finance issuance (leveraged loans and high yield bonds) rose in 1Q’14, with EUR 44.89 billion issued, a 4.7% increase quarter-over-quarter (q-o-q) but a 28.7% decline year-over-year (y-o-y). The increase q-o-q stems from the increase in high yield bond issuance, which experienced a surge during the first quarter of 2014, despite turmoil in eastern Europe; the high yield share of the leveraged finance market rose to 57.6%, up from 53.1% in 4Q’13.

Leveraged loan issuance, including first lien, second lien, and mezzanine financing, fell in the first quarter of 2014 to EUR 19.0 billion, down 5.5% q-o-q (EUR 20.1 billion) and 36.8% y-o-y. Amend-and-extend (“A&E”) transactions continue to take place, with slightly less than a third of deals in the first quarter structured as such (30.9% by euro amount), an increase from the fourth quarter of 2013 (26.7%). According to S&P, the loan pipeline at the end of March 2014 was EUR 35 million.

Primary issuance in 1Q’14 totalled EUR 25.87 billion on 64 deals, an increase of 13.7% but a decrease of 21.4%, re-spectively, q-o-q and y-o-y. Issuance from developed market Europe rose in the first quarter of 2014 but, given the turmoil in eastern Europe, issuance from emerging market Europe fell.

About the Report

Done in partnership with AFME High Yield Division, the AFME Leveraged Loan and High Yield report is a quarterly report on the trends and statistics of the European leveraged finance market, including both high yield loans and leveraged loans. Issuance volumes, credit trends, global comparative issuance data, market highlights and commentary are included.

For more information on AFME’s efforts in the European leveraged finance sector, please visit AFME.

Credits

AFME

• Director, Capital Markets: Gary Simmons

SIFMA Research

• Managing Director, Director of Research: Kyle Brandon
• AVP, Research: Sharon Sung