Primary reopening

Primary reopening

Published: March 17, 2022

European Leveraged Loan Index (ELLI) has registered a negative YTD performance equal to -1.81% as of 14/03/2022. 

While EU loan borrowers remain in no rush to issue new debt in the current environment, one existing borrower is out to a select group of lenders with a sizable loan add-on. The deal, which market participants describe as an add-on for a solid credit, is on the market at E+475 and offered at 97.5. This means that, while pricing levels have widened since Russia’s invasion of Ukraine, arrangers are looking to reopen the market, despite the day-to-day and even intra-day volatility of the past two weeks. This testified that investors are open for the right name at the right price, provided that it is a company insulated from both Russia and rising energy cost risk.

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The past two weeks have also brought the attention to investors’ portfolios, and this has moved from an initial spotlight on Russian risk onto the wider impact from the crisis. Portfolio managers are looking at their Russian exposure in detail and is now concentrating on the secondary effects on energy or other costs and raw materials shortages.

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