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!
Hi banker2018, whoops, looks like nobody chimed in here.... maybe one of these discussions below is relevant:
Or maybe the following pros can chime in... Tallganesh @qtqt123220" summitsandsparkles
Fingers crossed that one of those helps you.
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![]()
https://am.jpmorgan.com/blob-gim/1383479372236/83456/US%20HY-JPM%20no%2…</a" alt="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.
TLs commonly used to finance LBOs nowadays. While I've heard some sponsors groups at various banks focus more specifically and centrally on LBOs, most Lev Fin groups are a solid mix of refis / acquisition financings and LBO processes.
Fitch sends out a weekly LevFin/CLO email, you can sign up by using your .edu school email, great way for undergrads at home to read up on whats going on within HY.
Do you have to pay if you use your personal email?
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 Example:
AECOM Management Services (LBO - American Securities; Lindsay Goldberg) Jan-20 B/B2 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
Example:
Cox Media Group (LBO - Apollo) Nov-19 B/B2 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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