Covenant Light Loans to US and European Companies Top 2007

Dollar-denominated covenant light loans to US and European companies reached a record $260bn in 2013, or 57 percent of the total volume, and 69 per cent more than in 2007.Nearly €8bn in euro-denominated loans of this type were issued last year, topping the €7.73bn in 2007. So far this year, covenant light loans represented more than a quarter of all leveraged loans sold to institutional investors, up from 21 percent last year and 7 percent in 2007.

share of outstanding loans that are covenant-lite Buoyant credit markets are also translating into higher amounts of debt in LBOs, which have increased in Europe and in the US to near the 2007 all time highs of 6x EBITDA on average, according to S&P.

via Loan terms eased in search for yield – FT.com.

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