PLEASE HELP WITH: State of High-Yield Bond market / Lev Fin / League Tables

Hello everyone,

I'm interested in the state of the High-Yield Bond Market. I know that in the 80s high-yield bonds were used to finance large LBOs and that there was a few boom and busts. Are high-yield bonds still commonly used to finance LBOs? If so, does anyone have any idea on the percentage of high-yield bonds used for LBOs vs simply for fallen-angles and other regular capital raises?

Also, does anyone have any idea on banks whose Lev Fin groups work primarily on financing LBOs? My ideal job would be to work on analyzing an LBO target, pricing high-yield bonds (or syndicated loans) used for the acquisition, underwriting the financing (committing our banks balance sheet to the deal), and then marketing the high-yield bond to investors (or to other banks if it's a syndication) to get the bonds (loans) off of our banks balance sheet. Do you think this type of Lev Fin job still exists?

Lastly, do you know if there's any place to find good data on high-yield bond issuers? I have access to FactSet and a Bloomberg terminal.

Thanks for all your help!

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Comments (7)

Feb 15, 2018 - 11:24am

Hi banker2018, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:

  • Which is more senior, high yield bonds or mezzanine debt? The 4th edition of the WSO tech guide (p 39) states that high yield bonds are "similar to ... states that "mezzanine debt offers a higher rate of return than traditional high yield bonds ... also states that high yield bonds are senior to mezzanine
  • High-Yield and Restructured Debt Career Question I...........specialize in debt- mainly high-yield and preferred but also senior unsecured and liens. Because of my quant ... in high-yield and restructured debt that has both fundamental and quant analysis. I was thinking it ... any helpful advice. quant High Yield Warrants ...
  • High yield bond markets and LBOs as high yield bond markets can somehow finance LBOs? thanks. LBO leveraged buyout Bond High Yield LBO ... Hi all, can someone please explain to me the relationship between high yield bond markets and LBOs ...
  • UBS High Yield and Loan Capital Markets Program High Yield and Loan Capital Markets works with non-investment grade companies on a variety of debt ... trends. High Yield and Loan Capital Markets originates any combination of fixed rate, floating rate, first ... markets job. Here's the job description: Description High Yield and Loan C
  • Leveraged Loans&High Yield Capital Markets High Yield ... a position like this: I'll be starting soon as an analyst in Leveraged Loans/ HY Bonds Capital Markets ... btwn IG and Lev.). Was wondering what kind of work I'll be expecting with regards to: modeling ...
  • AMA- High Yield/Distressed Debt Sell Side Analyst considering the credit capital markets are significantly larger than equities. Ask away... High Yield to ... and retail. We publish mostly on high yield/distressed debt situations but also some special situation ... 2nd year analyst at a boutique broker-dealer from a non-target state school. Also a CFA Level ...
  • High Yield (Credit Analysis) Interviews / Case Studies Hi, I was just wondering what questions are typically asked during interviews for high yield ... (credit analysis) positions? Also, what types of case studies are given during these interviews? My ... background consists of investment banking and three years at a buyout firm, working mostly on LBOs and PIPEs, ...
  • More suggestions...

Or maybe the following pros can chime in... Tallganesh qtqt123220 summitsandsparkles

Fingers crossed that one of those helps you.

Dec 17, 2018 - 12:04pm

1 . Are high-yield bonds still commonly used to finance LBOs?

My understanding is this is less and less the case as loans make up more of the capital structure.

2 . If so, does anyone have any idea on the percentage of high-yield bonds used for LBOs vs simply for fallen-angles and other regular capital raises?

A bit old but this might help.

High yield: Use of proceeds
High yield: Use of proceeds

As for your last question, I am not super sure. My understanding is some banks (mostly MM, maybe BAML) have a levfin team that does its own modeling, handling both syndication and underwriting. Others have this more divided into different teams.

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May 25, 2020 - 12:29am

hey I can help in this area. I work in this space. feel free to message me.
there is a topic on LBO assumptions near this thread that will provide insight on your question.
1) Typical LBO - RC / 1L TLB / 2L TLB

AECOM Management Services
(LBO - American Securities; Lindsay Goldberg)
4.9x / 6.3x

Revolver / $200 / L+400
1st Lien Term Loan B / $1,090 / L+400
2nd Lien Term Loan B / $335 / NA (privately placed)

2L TLB market size is smaller, and as you see the tranche size is 24% of 1L+2L...
filtering 2L TLBs, besides a few outliers, you don't see 2L TLB's going above $700MM, especially $1B. other factors obviously.

2) Large Mega-deals - 2L-->Unsecured Notes (Bonds)
(Debt under 1L >$700-$1B - issue Notes)
RC / 1L TLB / Unsecured Notes


Cox Media Group
(LBO - Apollo)
4.0x / 6.0x

RC $325 / L+425
1L TLB / $2,025 / L+425
Unsecured Notes / $1,065 / 8.875%

why so much love for bonds?

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