ANALYTICS

European Leveraged Finance in Review

Value of Leveraged Loans and High Yield Bonds Issued 2005 - YTD September 2013

EURm 250,000
194,018

Leveraged Loans

High Yield Bonds

192,084 200,000

150,000

70,169 56,720

100,000

28,714

35,960 40,616

50,000 18,929 2005 32,946 2006

46,808 5,257 17,005 2007 2008 29,798 2009 56,261 2010 48,029 2011 69,595 2012 31,830 61,454

YTD 04 Sept YTD 04 Sept 2012 2013

N.B. Debtwire leveraged loan data commences from 2006

Volume of Leveraged Loan Deals and High Yield Bonds issued 2005 - YTD September 2013
Leveraged Loans High Yield Bonds

300 250 138 200 43 150 100 57 50 59 0 2005 2006 2007 2008 2009 2010 2011 66 48 57 10 126 131 169 86

91 77

48

183 95

167

2012

YTD 04 Sept 2012

YTD 04 Sept 2013

The value of new debt issued by leveraged companies in Europe increased by 63.1% YoY to EUR 118.2bn-equivalent in the nine months to 4 September 2013. This was driven by an almost doubling in the value of high yield issuance YoY to EUR 61.5bn and a 40.6% YoY jump in leveraged loan allocations, to EUR 56.7bn. Issuers across Europe printed a total of 167 high yield bonds in the nine-month period, up from 95 in the same period in 2012, while the number of leveraged loan deals were 60.4% higher YoY at 77. This resulted in a slight decline in the average leveraged loan deal size, to EUR 737m in YTD 2013, compared with EUR 846m in YTD 2012. German companies were the largest issuers in YTD September 2013, raising a total of EUR 27.2bn of high yield bonds and leveraged loans. They were followed by UK businesses, which brought EUR 22.8bn of debt in the same period. While companies in the two countries raised a similar level of new bonds of around EUR 13bn, Germany companies were able to tap the loan market with far greater ease, and raised EUR 15bn of new leveraged loans, compared with EUR 10.6bn in the UK.

ANALYTICS

European Leveraged Finance in Review

High Yield Bond Issuance by Country
EURm
USA

YTD September 2013

High Yield Bond Issuance by Industry

EURm Utilities
440 1,021

YTD September 2013

3,728
13,576

United Kingdom
Switzerland

Transportation Telecommunications Technology

3,798
477

14,330 1,053 4,773

Sweden Spain South Africa Portugal Norway Netherlands Luxembourg Japan

Jamaica

2,440
300

Services Retail Real Estate Pharmaceuticals Paper & Forest Products

Packaging Oil & Gas Metals & Mining

3,774 200 300 350 2,161 1,129 275 250 1,489 1,925
4,350 1,339 1,856 2,756 3,505

1,350 167 1,828 1,456 2,530 749

6,004

Italy
Ireland (Republic)

Manufacturing Leisure

750
177

Iceland
Hong Kong

Industrial products and services Healthcare

111
2,050

Greece
Germany

Gaming

12,193
6,732

Food & Beverage Financial Services Energy Services Consumer Products Construction & Homebuilding Chemicals and materials Automotive 0 530

France
Finland

250
171

Canada Bermuda Belgium Austria 0

241
75

1,500 2,387 9,761 5,000 10,000 15,000 20,000

300 5,000 10,000 15,000

High Yield Bond Issuance by Country

EURm USA
United Kingdom 1,793

YTD September 2012

High Yield Bond Issuance by Industry

EURm Transportation 881

YTD September 2012

5,423 2,995 872 1,540 557 400

98

Telecommunications
Technology Services

6,960 1,015 2,917 1,647

1,300 258

Switzerland
Sweden

Spain South Africa Portugal Norway

Netherlands

Paper & Forest Products Packaging Metals & Mining

2,115
189

Manufacturing Leisure

581 1,320 300 2,575

230 239

Jamaica
Italy

1,955 1,546 5,820 4,018 500 249

381

Ireland (Republic)
Germany

Industrial products and services

Healthcare Gaming Financial Services Energy Services Construction & Homebuilding

France Finland Denmark Canada Bermuda Belgium

Austria

1,781 1,100 2,851 5,874

0 2,000 4,000 6,000 8,000

171
1,009

Chemicals and materials Automotive

200 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

Telecommunications issuers have led the high yield market so far in 2013, bringing the two largest single bonds to market in the period. Total high yield issuance by telecoms companies in YTD 2013 stood at EUR 14.3bn, compared with EUR 6.96bn in the first nine months of 2012. The biggest was a USD 2.49bn 4.5% seven-year senior unsecured note priced by Japanese telecoms group Softbank Corp in April 2013 to back its acquisition of Sprint Nextel. UK cable company Virgin Media also issued a GBP 1.1bn 6% eight-year senior secured bond in February as part of the funding for its buyout by Liberty Global. Telecoms groups also brought a total EUR 11bn of leveraged loans between January and September 2013, up from EUR 3.03bn in the prior-year period. These included a USD 2.78bn term loan B allocated by Virgin Media as part of its buyout.

ANALYTICS

European Leveraged Finance in Review

Leveraged Loan Issuance by Country
EURm
USA

YTD September 2013

Leveraged Loan Issuance by Industry

EURm

YTD September 2013

8,705 10,625
1,321

Transportation
Telecommunications Technology Services Retail

754 11,042 4,087 5,869 2,209 871 1,754 80 2,406 1,748 1,724 884 1,126 4,138 1,621 4,502 359 828 5,940 4,778
0 2,000 4,000 6,000 8,000 10,000 12,000

United Kingdom Switzerland Sweden

Spain

924 555 1,381

8,011 797

Pharmaceuticals Packaging Metals & Mining Media Manufacturing Leisure Industrial products and services Healthcare Food & Beverage Entertainment
15,044 7,025

Norway Netherlands Luxembourg

Ireland (Republic)

1,375 187

Greece Germany France

Denmark Belgium

Energy Services Consumer Products Construction & Homebuilding

602 169 0 5,000 10,000 15,000 20,000

Chemicals and materials Automotive

Leveraged Loan Issuance by Country

YTD September 2012

Leveraged Loan Issuance by Industry

EURm

YTD September 2012

EURm
USA United Kingdom Switzerland

6,756 9,689 1,578 1,575

3,706 290 490

Transportation Telecommunications Technology Services

500 3,031 4,784 3,551 1,828 457 1,007

932 932 2,090 666

Sweden Spain Norway Netherlands Italy Germany

France Finland Canada

Retail Pharmaceuticals Packaging Media Manufacturing Leisure Industrial products and services
9,827 4,719

500

Healthcare
Food & Beverage Financial Services Construction & Homebuilding Chemicals and materials

6,158 4,117 544 1,299 2,683 6,037 0 2,000 4,000 6,000 8,000

600 500 386

0 5,000 10,000 15,000

Belgium

Automotive

The automotive industry was the second-most active in the high yield market in the first nine months of 2013, with companies across Europe issuing a total of EUR 9.76bn of new bonds. This was an increase from EUR 5.87bn in the same period in 2012. Among the large issuers in this industry were Italian carmaker Fiat SpA, which printed a EUR 1.25bn five-year 6.625% senior unsecured bond in March, and French group PSA Peugeot, which brought a EUR 1bn five-year 7.5% senior unsecured note in February. Both of these bonds were raised to fund general corporate purposes. While automotive companies were less active in the loan market, Germany tyre producer Continental AG, allocated a jumbo EUR 3bn five-year senior secured revolving credit facility in January 2013 to refinance existing debt. A number of new industries have been represented in bond and loan issuance in YTD 2013 that did not issue debt in the same period in 2012, including the consumer products, retail, energy services and a pharmaceutical deal.