Tom’s Two Cents: Debt Markets

Introducing our debt capital markets blog: Tom’s Two Cents. I will share thoughts and insights here on a regular basis in between issues of our more in-depth newsletter, The Wire.

Loan volume is declining

Loan volume thus far in 2015 has been down year-over-year due, in part, to slower M&A activity, reduced financing activity, and longer processes. Check out the chart below:

But debt capital remains in abundant supply

Debt capital continues to be readily available. We are seeing new lenders and funds popping up seemingly on a weekly basis. With somewhat muted deal volume and increased disintermediation and competition from unitranche providers, we have also seen more aggressiveness from mezzanine lenders. For repeat issuers and stronger credits, mezzanine lenders will price deals as low as the 10% to 11% range with 0% to 1% payment-in-kind and no warrants.

Check out our most recent transactions here.