European leveraged finance issuance (leveraged loans and high yield bonds) decreased in 4Q’14 to EUR 27.1 billion, a 30.5% decrease quarter-over-quarter (q-o-q), a 36.8% 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 54.0% drop during the fourth quarter of 2014; the high yield share of the leveraged finance market declined to 30.4%, down from 45.9% in 3Q’14.

Leveraged loan issuance, including first lien, second lien, and mezzanine financing, declined in the fourth quarter of 2014 to EUR 18.9 billion, down 10.6% q-o-q (EUR 21.1 billion) and down 6.3% y-o-y (EUR 20.1 billion). Amend-and-extend transactions continue to take place, with slightly less than a third of deals in the fourth quarter of 2014 structured as such (EUR 5.8 billion or 30.7% by euro amount), an increase from the third quarter’s EUR 2.4 billion.

Primary issuance in 4Q’14 totalled EUR 8.3 billion on 27 deals, a decrease of 54.0% and 41.3%, respectively, q-o-q and y-o-y. Issuance from developed market Europe fell in the fourth quarter of 2014 as did issuance from emerging market Europe.

Primary issuance in developed market Europe in the fourth quarter of 2014 was EUR 7.57 billion on 23 deals, a sharp decline of 55.9% and 45.2% by euro amount, respectively, q-o-q (EUR 17.15 billion on 42 deals) and y-o-y (EUR 20.80 billion on 64 deals). In emerging market Europe primary issuance in 4Q’14 was EUR 0.68 billion on 4 deals, a decline of 11.4% and 65.0% by euro amount, respectively, q-o-q (EUR 0.77 billion on 4 deals) and y-o-y (EUR 1.95 billion on 11 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