European leveraged finance issuance (leveraged loans and high yield bonds) decreased in 3Q’14 to  38.8 billion, a 58.5% decrease quarter-over-quarter (q-o-q), a 28.9% decrease year-over-year (y-o-y), and the smallest quarterly issuance since 3Q’12. The decrease q-o-q stems from the large decline in high yield bond issuance, which experienced a 69.6% drop during the third quarter of 2014; the high yield share of the leveraged finance market declined to 45.6%, down from 62.2% in 2Q’14.

Leveraged loan issuance, including first lien, second lien, and mezzanine financing, declined in the third quarter to  21.1 billion, down 40.4% q-o-q ( 35.4 billion) and 39.1% y-o-y. Amend-and-extend (“A&E”) transactions continue to take place, with slightly more than a tenth of deals in the third quarter structured as such (11.3% by euro amount), a decrease from the second quarter (21.4%).

Primary issuance in 3Q’14 totalled  17.72 billion on 45 deals, a decrease of 69.6% and 11.3%, respectively, q-o-q and y-o-y. Issuance from developed market Europe fell in the third quarter as did issuance from emerging market Europe.

Primary issuance in developed market Europe in the third quarter was  16.95 billion on 41 deals, a decline of 70.4% and 5.5% by euro amount, respectively, q-o-q ( 57.2 billion on 102 deals) and y-o-y ( 17.9 billion on 42 deals). In emerging market Europe primary issuance in 3Q’14 was  0.77 billion on 4 deals, a decline of 24.1% and 62.2% by euro amount, respectively, q-o-q ( 1.0 billion on 5 deals) and y-o-y ( 2.0 billion on 6 deals).

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
• Senior Associate: Justyna Podziemska