1. U.S. Syndicated Loan Market Review
Changes in Wholesale Lending: 2007 versus 2013
April 2013

2. U.S. Syndicated Loan Volume ─ 2012 Issuance at ‘05/’06 Levels
Loan Pricing Corporation (LPC) places a syndicated financing in either category based on issuer credit ratings or the transactions drawn spread over LIBOR. The Leveraged credit profile is a senior debt rating of BB+/Ba1 or lower and/or a pricing margin of LIBOR+175 or higher
Source: Thomson Reuters LPC

3. U.S. Syndicated Commercial Real Estate Loan Volume – Nearing ‘05/’06 levels/REIT issuance above
Source: Thomson Reuters LPC

4. U.S. Leveraged Loan Volume Returning to ‘06 Levels
Excludes Existing Tranches of Add-ons and Amendments & Restatements with No New Money
These numbers comprise loans U.S. dollar denominated
Source: S&P Capital IQ

5. U.S. Syndicated Loan Volume – New Money Issuance below ‘05/’06 levels*
2012 new money issuance of 29% remains below levels seen in 2005 (34%) and 2006 (45%)
* Measured as a % of Total Issuance
Source: Thomson Reuters LPC

6. Investment Grade Pricing – Declining, but still above ‘05/’06 levels
Source: Thomson Reuters LPC

7. Investment Grade Tenors – 5 Year Terms Dominate
Source: Thomson Reuters LPC

8. Investment Grade – Covenant Levels Essentially Unchanged
Source: Thomson Reuters LPC

9. Leveraged Pricing ─ Declining, but still above ‘05/’06 levels
Source: S&P Capital IQ

10. Leveraged – Covenant Levels Remain Relatively Stable
Source: Thomson Reuters LPC

11. Average Debt Multiples − Climbing / Equity Contributions − Declining
Criteria: Pre-1996: L+250 and Higher; 1996 to Date: L+225 and Higher;
Prior to 2011, media and telecom deals were excluded.
Equity includes common equity and preferred stock as well as holding company debt and seller note proceeds down streamed to the operating company as common equity
Source: S&P Capital IQ

12. New Issue Volume ─ Second-Lien / Covenant-Lite Loans
Excludes Existing Tranches of Add-ons and Amendments & Restatements with No New Money
These numbers comprise loans denominated in all currencies and are subject to revision as Standard & Poor’s LCD collects additional data.
Excludes Existing Tranches of Add-ons and Amendments & Restatements with No New Money
Excludes DIP, second liens and unsecured transactions
These numbers comprise loans U.S. dollar denominated
Source: S&P Capital IQ

13. Leveraged Lending ─ Institutional Segment Dominates
A growing trend in leveraged lending is springing maintenance provisions in revolvers
These are typically leverage covenants that become effective only when revolver draws occur
US Bank tracked 23 recent transactions that have incorporated springing covenants
Of the nearly $40 billion in facilities (details below), only $5 billion (14%) represent revolvers, with the balance representing Covenant-Lite Term Loan B, Second-Lien and/or Term Loan C tranches (institutional oriented tranches)
Source: Standard & Poor’s LCD / Thomson Reuters LPC / market sources

14. Net Chargeoff Rate – Top 100 Banks
Commercial & Industrial and Commercial Real Estate loans continue to track to historical credit cycles
The new comer to credit cycles is residential mortgages