European leveraged finance issuance, which includes leveraged loans and high yield bonds, totalled 21.6 billion in the fourth quarter of 2010, a decline of 18.9 percent from the third quarter (26.6 billion). For the full year 2010, 93.7 billion was issued, a 6.7% increase from 2008 but well under the high of 265.6 billion reached in 2007. Proceeds are generally used to refinance or restructure debt, although LBO/MBO activity has picked up considerably in the last half of the year. High yield bond issuance in the leveraged debt markets continues to inch higher in market share, representing 68.3% of all leveraged debt for 4Q’10.

The trend of bank disintermediation continues to remain in place in the European markets as banks continue to reduce exposure. The rise of high yield bond issuance, and more particularly senior secured structures that rank pari passu to bank facilities, also picked up in 2010.

About the Report

Done in partnership with AFME High Yield Division, the AFME Leveraged Loan and High Yield report is a quarterly report on the trends and statistics of the European leveraged finance market, including both high yield loans and leveraged loans. Issuance volumes, credit trends, global comparative issuance data, market highlights and commentary are included.

For more information on AFME’s efforts in the European leveraged finance sector, please visit AFME.

Credits

AFME / EHYA

• Managing Director, Gilbey Strub
• Associate, Sidika Ulker

SIFMA Research

• Managing Director, Director of Research: Kyle Brandon
• Manager: Sharon Sung