RESEARCH: BDC 2Q17 Trends and Analysis report shows heavy deal flow, slight reversal from recent quarterly descends in first lien average cash coupon - Debtwire

RESEARCH: BDC 2Q17 Trends and Analysis report shows heavy deal flow, slight reversal from recent quarterly descends in first lien average cash coupon

12 September 2017 - 12:00 am

The latest edition of the BDC Quarterly Trends and Analysis report provides a two-year look back at pricing trends for all issuances and exits for ~40 BDCs Debtwire tracked through 2Q17. The BDCs tracked, carry the largest market capitalizations in the industry. This quarter, we have added Carlyle’s BDC, TCG BDC, Inc. (CGBD), to our report, featuring industry analysis, average cash coupon and first lien deal count per sector.

 

Deal volume remains very heavy as of 2Q17. Total entrances and exits were both up significantly YoY, illustrating the high level of activity in the current market. Nonetheless, there was a net outflow in first lien deals amongst the BDCs.

 

In 2Q17, the average first lien cash coupon increased 35 basis points QoQ to 8.1%. Meanwhile, the average LIBOR spread decreased 12 basis points QoQ to 6.4%. The increase comes after 4 straight quarters of tightening in the average cash coupon. However, the average cash coupon and LIBOR spread on subordinated deals continued its decline on both a QoQ and YoY basis, to 9.8% and 8.4%, respectively in 2Q17.

 

We continue to see BDCs express a cautious approach to retail and energy. In retail, we saw more than twice as much outflow (of total fair value) for exits when compared to entrances (USD 136m net outflow). Energy sector deal flow decreased to 13 entrances, from 19 last quarter. 

 

CLICK HERE to read the Quarterly Trends and Analysis in PDF format
CLICK HERE to read the PDF of all the new issuances and exits by the BDCs in 2Q17
CLICK HERE to read the spreadsheet of all the new issuances and exits by the BDCs in 2Q17