M&A will drive leveraged lending growth

Author: Olly Jackson | Published: 4 Feb 2019

Brexit and the end of the US government shutdown are likely to boost the leveraged lending market throughout 2019, providing much-needed clarity to issuers and setting off a bumper year supported by a buoyant M&A market.

"This has been one of our busiest Januarys ever," said David Miles, partner at Dechert. "We have seen record levels of fundraising across the landscape and the considerable dry powder in the M&A market means there is so much liquidity. It’s very different to 2008; this will drive activity".

Leveraged lending is expected to resist the multitude of global risks and post respectable figures this year, following a drop in issuances by a third last year. However, price volatility is likely to persist throughout 2019.

With valuations continuing to rise past extortionate levels, the concern is that firms with high leverage ratios will suffer from geopolitical risk. In this case, it...