Deloitte Alternative Lender Deal Tracker: issue 2 2017

Article

Liquidity in all shapes and forms

Increased competition strengthens a borrower friendly market

Welcome to the sixteenth issue of the Deloitte Alternative Lender Deal Tracker which now covers 58 leading Alternative Lenders, with whom Deloitte is tracking primary mid-market deals across Europe. This issue covers data for the second quarter of 2017 that closed with 70 deals completing, representing a 5% increase in deal flow on a last 12 months basis in comparison with the previous year.

Deloitte Alternative Lender Deal Tracker: Issue 2 2017

The first eight months of the year have been fairly positive in economic terms, with performance strengthening led by the European, Japanese and emerging markets. This positivity continues to filter through into the loan markets, where a supply demand imbalance is still evident. There was little sense of a summer break, where according to S&P LCD €12.5bn of loans were issued in July. A recent number of large Unitranche deals included JVH Gaming – a Waterland asset (€310m), Non-Standard Finance (£225m), Chassis Brakes International (€175m), Schuelerhilfe (€135m), and Duomed (€100m).

Focusing on the Dutch market we have seen a slight decrease in deal flow (year-on-year) predominantly driven by a bumper third quarter in 2015. Overall we observe a more robust and stable deal flow of c. 4 to 6 deals in the last twelve months. Furthermore, the number of lenders that have completed a transaction is increasing. Three lenders however remain dominant in c. 50% of the direct lending deals to date. The Dutch financing landscape is still dominated by the main Dutch banks who are increasingly competitive in terms of pricing but also flexibility (e.g. covenants, leverage, structuring, etc.). We however observe an increased interest from borrowers in alternatives to bank debt to diversify their sources of funding or to potentially unlock further financing potential to facilitate growth. The trend among debt funds where there is an increased focus on providing so-called stretched senior facilities (pricing <550bps) is a first step in bridging the gap between traditional senior bank debt and the renowned Unitranche.

Deloitte Alternative Lender Deal Tracker: issue 2 2017

Insights into the Deloitte Alternative Lender Deal Tracker

Currently covers 58 leading Alternative Lenders. only primary mid-market UK and European deals are included in survey

600
Total deals completed
icon-eu
300
Euro deals completed
icon-uk
274
UK deals completed

* For the purpose of the deal tracker, we classify senior only deals with pricing L + 650bps or above as unitranche. Pricing below this hurdle is classified as senior debt.

Background

Deloitte Debt Advisory is the market leader for mid-market alternative lender transactions, having completed over 25 alternative lender transactions in Europe in the last two years.

  • We provide unparalleled access to global liquidity through our dedicated global Alternative Lender coverage teams in over 30 key financial centers (London, Frankfurt, Paris, Madrid, Milan, Geneva, New York and Singapore).
  • Our international practices work in close cooperation and as one team with Dutch native speakers in London and Amsterdam covering alternative lenders in London, providing low key access to Alternative Lenders for Benelux companies.

More information

Would you like more information about corporate finance debt advisory? Please contact Alexander Olgers at +31 (0)88 288 6315.

Vond u dit nuttig?