Where Europe’s Real Direct Lending Opportunity Lies
NEW YORK, April 1, 2016 – Against the backdrop of uncertain credit markets and directionally differing economies, an interesting cross-Atlantic investment dynamic is underway.
Churchill Asset Management in the News
Sponsors Holster Revolvers for Delayed-Draw Loans
NEW YORK, January 4, 2016 – I’ve discussed at length the development of revolving credit facilities. Corporate borrowers and private equity sponsors have continued to utilise this tool to maximise flexibility for acquisitions, dividend recaps and working capital. But during 2015 we’ve noted the increasing popularity of another weapon in an issuer’s financing arsenal: namely, the delayed-draw term loan (DDTL).
The Mid Market and The Myth of Loan Liquidity
NEW YORK, December 3, 2015 – One of the enduring fictions about middle market loans relates to their tradability. Smaller loans, the theory goes, are priced at a premium because there are fewer ready buyers. Unlike their broadly syndicated cousins, loans below $250 million have no effective secondary market. That’s the idea, anyway.
Don’t Listen to the Talk, Mezz Definitely Isn’t Dead
NEW YORK, November 5, 2015 – These days it’s popular sport at loan conferences to kick the mezzanine asset class. After the credit crisis, when some investors in subordinated debt took a licking, the common question heard among market players was: “Is mezz dead?” Today the refrain is: “Is mezz still dead?” And yet, in conversations with practitioners, it seems mezz is alive and well.
Mid-Market Syndicate Game Changes Again
NEW YORK, October 8, 2015 – When your correspondent began distributing middle market loans (in the waning days of the Reagan administration), the concept was considered novel. Back then money-centre banks underwrote and syndicated mainly large corporate loans to other relationship banks. Smaller deals were mostly self-arranged, club affairs among regional banks and finance companies.
Hold Your Nose and Buy the Recap – Sometimes
NEW YORK, August 6, 2015 – It’s a perennial source of angst for loan buyers that target private equity-backed companies: how do you analyse transactions that finance a distribution to the sponsor by taking invested cash out of the company?
Credit Due – After Jimmy, Banking is Different
NEW YORK, July 9, 2015 – The untimely passing last month of Jimmy Lee, JP Morgan Chase’s vice-chairman, at the age of 62, left many in the banking world reflecting on the legacy of a man who changed the face of buy-out finance. But it gave us the opportunity as well to consider the state of the industry he leaves behind.
Credit Due – Who Wants to Make Revolvers?
NEW YORK, June 11, 2015 – It’s been called the most mispriced security on Wall Street. It’s also the least-known casualty of bank regulatory reform. Welcome to the revolving credit facility.TIAA- CREF).
Credit Due – Cash Flow or Cash Faux?
NEW YORK, May 7, 2015 – Leveraged lending guidelines have set six times total leverage as the limit above which a loan would likely be criticised by examiners. Less noted by the media, but of growing interest to market players, are the components of leverage metrics: specifically, how the numerator (debt) and the denominator (earnings) are being massaged to put the best face on increasingly leveraged transactions.