Archives| PDF| Research |Week of Feb 14, 2022
“If you don’t have friends infected right now, you don’t have friends.”
– Brenda Crabtree, MD. Infectious disease specialist, Mexico City.
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2022 Capital Markets Outlook (First of a series)
In our 2022 Capital Markets Outlook, we discussed expectations for the year ahead. Topics included covenant-lite loans, inflation and rising interest rates, the LIBOR/SOFR transition, the heightened prevalence of unitranche loans and the continued focus on ESG.

Kelli Marti, Churchill’s head of CLO management, and Jessica Nels, capital markets, begin a series of market commentaries on the Outlook:

Historically, covenant-lite was not a topic for much conversation in the middle market, as these loans were seen mostly in the broadly syndicated market. As the market evolved competition intensified and lines blurred between public and private credit. Cov-lite increasingly gained share among smaller, unrated loans. What prompted this change? We observed:

  • Larger sponsors eager to put capital to work are coming down-market and demanding large market terms from their club lenders;
  • Increased competition among lenders resulting in willingness to differentiate with looser terms;...
2022 Capital Market Outlook 

Topics include: 
Cov-lite trends
Inflation & rising interest rates
LIBOR to SOFR transition
Mega-tranche uni trend
ESG takes center stage
Readers' Say
This Week’s Question
Lenders: Borrower-friendly concessions to win a deal in 2022?
(*All responses are confidential.)
Yes, reduce rates/fees
Yes, increase hold size
Yes, accept covenant-lite
Yes, increase leverage
Last Week's Results
Which team will be the winner of Super Bowl LVI?
Chart of the Week
Heavy on the Lite
Cov-lite unitranche volume spiked in both the large corp. and MM segments.
Source: Refinitiv LPC
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Stat of the Week
 Loan Stats at a Glance 
PDI Picks
It’s not all about institutions
All the talk is around retail investment as fund managers reach out to this potentially huge investor base...
Leveraged Loan Insight & Analysis
More institutional deals get done
without a CSA this month
The institutional loan market has mostly shifted to a term SOFR base rate this year. While there are a few deals that have been done at a spread over Libor, these are on the decline...
The Pulse of Private Equity
“Too much capital chasing too few deals”?
“Too much capital chasing too few deals” is a common refrain in the direct lending market. Is it true? It doesn’t appear to be, according to PitchBook’s Annual Global Private Debt Report...
Contact: Alex Lykken / PitchBook
High-Yield Bond Statistics
Weekly fund flows source: Lipper
DL Deals: News & Analysis
Volatility primes more records
for jumbo unitranche loans
Jittery markets are priming new records for jumbo unitranche financing. At least a few mandates are in the works that exceed Galway Insurance’s $3.4 billion record last year...
Covenant Trends 
Average Free-and-Clear as a
Multiple of Pro Forma Adjusted EBITDA
Private Debt Intelligence
Special situations funds raise
more capital through the pandemic
North America-focused fundraising for private debt hit new highs during the pandemic, with $105.7bn raised in 2020 and $128.6bn in 2021...
Debtwire Middle-Market
Contact: Hema Oza/Debtwire 
Feb Update: Middle Market Deal Terms at a Glance
Select Deals in the Market
This publication is a service to our clients and friends. It is designed only to give general information on the market developments actually covered. It is not intended to be a comprehensive summary of recent developments or to suggest parameters for any prospective financing opportunity.