1. RESEARCHING DEALS AND MARKETS: why don’t the sources agree?
Ian Hunter
June 2017
Range – news 10 minutes to talk thru the key sources and issues in this area
Background is my team is increasingly asked to do BD research, by which I mean the M&A, CM and lev fin markets rather than industrial sectors
The three things you are likely to be asked for in this area are market totals, lists of deals and expert commentary on the markets.
Jumping straight in, these are my favourite free sources [SLIDE]

2. FREE SOURCES FOR M&A, CAPITAL MARKETS AND LEVERAGED FINANCE STATS
Title
Scope
Thomson Reuters Deals Intelligence
quarterly league tables with an intro and additional analysis
Bloomberg
league tables only
Dealogic Insights
quarterly
‘Law firm memos’
law firms, The Big 4 etc
AFME High Yield & Leveraged Loan Report
quarterly, Europe only
TR Leveraged Loan Monthly and Corporate Bond Monthly
charts (and underlying data) on detailed aspects of these markets. US centric.
Moody’s, S&P and Fitch
press releases only, not full reports
Mergermarket Remark
Monthly M&A Insider and others
TR Deals Intelligence [quarterly league tables with an intro and additional analysis]
Built around league tables but with other charts, and several paragraph intro to each section.
Divided into broad categoires of Capital Markets, M&A, Syndicated Loans etc.
Jargon buster - M&A fairly straightforward, CM usually divided into DCM and ECM (bond issues and share issues to you and me – IPOs (new issues of shares) plus follow-ons (rights issues), lev fin divided into leveraged loan and HY bonds, so need to look in two different places: TR DCM report and TR Syndicated Loans report.
[Volume (or value) v deal count] MOVE TO LATER
The best for commentary is what I’ve called ‘Law firm memos’ e.g. Deloitte Al Deal Tracker, PwC IPO watch, Clifford Chance M&A inflows and outflows –
AFME – most detailed free source for lev fin e.g. …. but European only…
TR LLM and CBM – the best free sources in lev finance
Mergermarket Remark reports – M&A and ECM
[Top tip – PowerPoint to acess Excelk in underlying data – samrs ryping if writing a presentation.]

3. THOMSON REUTERS DEALS INTELLIGENCE

4. PAID-FOR SOURCES The Big 3 Specialist sources Thomson One Bloomberg
Dealogic
Specialist sources
Capital Structure
Thomson Loan Connector
Mergermarket and Debtwire
S&P LCD
Moody’s
IJ Global and PFI
Xtract Research and DebtXplained
So why use the paid-for sources?
Lists of deals difficult to get for free
Drilling down to country level
So far so good.. BUT…[NEXT SLIDE]

5. THE ISSUES Finding a (free) source that gives the whole picture
Publishers disagreeing
Relying on a database total v the published reports
Double counting - from the same published source the sum of the parts (e.g. breakdown by use of proceeds) adds up to more than the published total
Finding a source that gives the whole picture – e.g. TR league tables – may drill down in one region but not another, detail (e.g. W Europe v EMEA)
Publishers disagreeing:
Can accept that exact figures may disagree but not direction of the market!
Currency – remember to exchange (TR always in $, AFME and Debtwire always in Euros)
Double counting – SLIDE
Another jargon buster bit: use of proceeds (refi v M&A v Other/General Corporate Purposes)
[Understanding the market breakdown e.g. sponsor-backed not subset – cuts across several subset): adapt table from Alex (Feb )]

6. THE ISSUES: WHEN THE PUBLISHERS DISAGREE
AFME
“European leveraged finance issuance reached €202.7 billion [$219bn], an increase of 18.5% from €171.1 billion in 2015.”
 Debtwire
“The European leveraged finance primary issuance strengthened in despite a weak start to the year - a total of EUR 222bn [$241bn] was raised across the leveraged loan and high yield bond markets, a 24% increase on 2015”
Thomson Reuters
“European leveraged loan issuance fell to $183 billion in 2016, a 15% drop from the prior year
High-yield bond issuance for European borrowers increased 5% in 2015 to billion.” [TOTAL: $276bn]
European leveraged loan issuance fell to $183 billion in 2016, a 15% drop from the prior year (Slide 24 of Leveraged Loan Monthly) (by contract US leveraged loan issuance climbed to $875 billion in 2016, up 12% from a year earlier and the third biggest year on record – slide 7)] [TR]
[International high-yield bond issuance for European borrowers increased 5% in 2015 to 93.4 billion. December volume declined to just $1.1 billion (Slide 46 of Corporate Bond Monthly).] [TR]

7. THE ISSUES: WHEN THE NUMBERS DON’T ADD UP
Chart 1: Lev loans market total
2014:
$200bn
2015:
$216bn
2016:
$182bn
Chart 2: Lev loans breakdown by use of proceeds
Refi
M&A & new Money
Total
2016:
$103bn
$91bn
$194bn
More about terminology: refi v M&A & New Money v GCP or other
[Cutting across these categories, LBOs and sponsor-backed etc: these not a sub-set of refi or New Money or M&A. Also LBS etc – see Lembecke ]
Source:
TR LLM DEC2016 (issued Jan):
SLIDE 24 – EURO LEV LOAN ISSUANCE: $ bn
TR LLM FEB-17 (issued MAr)
SLIDE 16 - $194.83

8. THE SOLUTION Be consistent - rely on one source throughout if possible
If having to present conflicting data point this out ‘due to differences in methodology…’
use database searches for lists of deals, not market totals
An art not a science?
[Go straight to favourite source rather than Googling (unless looking for commentary)]
Use Google Advanced e.g. site operator
Despite being based on a finite number of deals worth finite amount of money, analysing these amrkts seems to be an art not a science. OR
Bizarrely for research based on numbers, analysing these markts seems to be an art not a science.