Loan refinancing activity and robust high yield bond issuance extended or diminished $750 billion of loans within the refinancing cliff timeframe over the last 12 months ended June 28, 2013, according to Fitch Ratings' 'Bridging the Refinancing Cliff, Volume VII,' published today.
The refinancing cliff peak, which once represented the most intimating portion of the cliff back in 2009 at approximately $750 million (2013-2014), has been diminished to just $340 million.
Of the $970 billion of loan issuance over the last four quarters, approximately 66% has been directed towards loan refinancing. The U.S. high-yield bond market has also contributed greatly in redistributing loans as bond-for-loan takeout volume totaled $105 billion over the last four quarters.
Fitch notes that issuers have been intensity focused on extending longer dated loan maturities in 2016 and beyond. Over the last 12 months, approximately 40% of all loan refinancing issuance has gone to refinance a loan maturity in 2016 or 2017. As a result, the total amount of loans coming due beyond 2016 has increased substantially.
This installment of the series also provides a breakdown and analysis of the some of the larger leveraged buyout (LBO) concentrations that dated back from the pre-crisis time period. Fitch believes these large concentrations posed one of the greatest risks to the market's ability to successfully extend the refinancing cliff. Since the end of 2009, the top 10 LBO companies with the largest debt concentrations in 2013 and 2014 have reduced the total amount of debt coming due in these years by 90% and 84%, respectively.
The full report 'Bridging the Refinancing Cliff' is available at www.fitchratings.com/sectors/CorporateFinance/Leveraged Finance.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
--U.S. Leveraged Finance Market Quarterly: Second-Quarter Synopsis (July
-- Fitch U.S. High Yield Default Insight - May 2013 (June 2013)
-- Fitch 50 - Structural Profiles of 50 Leveraged U.S. Credits (July 2013);
-- U.S. Leveraged Finance and the Credit Cycle (Do Signs Point to a Return to the 'LBO Boom' Days?) (June 2013);
--U.S. Corporates LBO Screen (May 2013);
--U.S. Leveraged Finance Multiple EV-aluator (May 2013);
--Leveraged Finance Annual Manual for the Americas (April 2013).
For more information, visit: www.fitchratings.com/usleveragedfinance.
Applicable Criteria and Related Research: Bridging the Refinancing Cliff
(Volume VII -- Pace of Refinancing Accelerates)
Fitch 50 -- Structural Profiles of 50 Leveraged U.S. Credits
U.S. Leveraged Finance and the Credit Cycle (Do Signs Point to a Return to the 'LBO Boom' Days?)
U.S. Corporates LBO Screen
U.S. Leveraged Finance Multiple EV-aluator
Leveraged Finance Annual Manual for the Americas
- Fitch Ratings