U.S. leveraged loan issuance held steady over the past week, with $7.6 billion in volume from 11 issuers, according to S&P Capital IQ/LCD. The market remains in a state of price discovery, with price flexes favoring both the buyside and the sellside during the week.
With the recent activity, year-to-date US leveraged loan volume grows to $471 billion, down from $498 billion at this point last year. For all of 2013 there was $605 billion in volume, a record.
The activity comes amid a sustained sour tone, at least as far as retail investors are concerned. Indeed, U.S. loan funds saw their 13th straight week of net withdrawals, with another $825 million exiting the asset class reported yesterday, according to Lipper. Over the past 26 weeks loan funds have dwindled by some $14 billion.
The net effect of the rocky conditions of recent weeks is that new-issue yields have widened, says LCD’s Chris Donnelly, in his weekly market wrap. The average yield of single-B new-issue institutional loans rose 10 bps this week, to 5.57%, while the average BB yield increased to 4.53%, from 4.44% a week ago.
As for deals in market, Level 3 Communications made the biggest splash this week by upsizing its planned $1.5 billion covenant-lite loan, which backs the acquisition of TW Telecom, to $2 billion, trimming the discount on offer in the process.
Private equity sponsors were in the mix this week. GI Partners launched a $243 million credit backing the acquisition of janitorial services concern Kellermeyer Bergensons while Bain brought to market a $360 million loan supporting its buyout of California-based TOMS Shoes.