Private Equity Analyst Quotes Finance Partner on Second-Lien Loan Market Trends
Finance partner Steve Rutkovsky (New York) is quoted in an article published in the October issue of Private Equity Analyst (also in WSJ Pro Private Equity) on factors related to the recent momentum in second-lien loan issuance. The article states that second-lien loan issuance hit $1.3 billion during the second quarter of this year, more than double the $600 million of issuance during the first quarter, but still well below the $3.4 billion of issuance during the second quarter of 2015, according to LCD, a unit of data provider S&P Global Market Intelligence. The third quarter stands to outpace the prior one with $1.1 billion of issuance for the months of July and August, according to LCD.
And despite the recent uplift, just how wide the second lien window will open, even for more attractive borrowers, remains to be seen. "A lot will depend on the outlook for the economy," said Steven Rutkovsky, a partner at law firm Ropes & Gray LLP. He cited continued investor demand for higher-yielding paper in the debt markets as a potential driver of volume. Although he expects the upward momentum to continue, he added that "it's anyone's guess as to how deep it's going to be."