Volume of leveraged loan repricings skyrockets.
The “borrower’s market” phenomenon has passed a new milestone, with leveraged loan repricings hitting a record volume so far this year. Some of the repricings have had low or no fees attached, meaning borrowers were able to call up lenders and demand a lower rate.
The benefits are compelling, experts say, as there is currently nothing in the market to compare to the low- or no-fee repricing deals. And it’s all very familiar: issuers simply hit up existing lenders for seemingly ever cheaper money. According to Leveraged Commentary and Data, first-quarter loan repricings were a record $126.7 billion, up from $73 billion in all of last year.
According to LCD, the first quarter repricing figure includes $83 billion of “cram downs,” where borrowers complete a loan repricing via an amendment to the original loan, bypassing syndication altogether and giving existing investors no choice but to go along.
The first quarter figure beats the previous quarterly record of $111 billion in 2007, on the eve of the credit crisis.