Aug 23, 2019

Global economic concerns are impacting the leveraged loans market

Illustration: Sarah Grillo/Axios

Global economic concerns eating into the leveraged loans market, thus making it more difficult for private equity to close deals.

Why it matters: Five U.S. leveraged loan offerings have been pulled so far this month. Summer vacations could be to blame, but this summer is the exception. Instead, the last such slowdown came at year-end 2018, mirroring broader economic worries.

  • Some offerings are still moving forward, but often with more lender-friendly terms or reduced offering sizes. Ancestry.com just did both, for a dividend recap that would benefit owner Silver Lake Partners.
  • Better credits are always, well, better credits. But those on the wrong side of the tracks are being treated worse than is usual.

Policy matters: If you're an issuer with significant exposure to the U.S.-China trade war — which significantly escalated this morning — then you've got to give on pricing. And it's become hard to sell with a floating-rate, given Fed uncertainty that is unlikely to be resolved today in Jackson Hole.

The big picture: The leveraged loan market's real test will come after Labor Day, when the spigot turns significantly to the left.

Go deeper: China announces retaliatory tariffs on $75 billion of U.S. goods

Go deeper

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 4 p.m. ET: 5,463,392 — Total deaths: 344,503 — Total recoveries — 2,195,325Map.
  2. U.S.: Total confirmed cases as of 4 p.m. ET: 1,653,904 — Total deaths: 97,948 — Total recoveries: 366,736 — Total tested: 14,163,915Map.
  3. World: Italy reports lowest number of new cases since February — Ireland reports no new coronavirus deaths on Monday for the first time since March 21 — WHO suspends trial of hydroxychloroquine over safety concerns.
  4. 2020: Trump threatens to move Republican convention from North Carolina — Joe Biden makes first public appearance in two months.
  5. Public health: Officials are urging Americans to wear masks over Memorial Day.
  6. Economy: New York stock exchange to reopen its floor on Tuesday — White House economic adviser Kevin Hassett says it's possible the unemployment rate could still be in double digits by November's election — Charities refocus their efforts to fill gaps left by government.
  7. What should I do? Hydroxychloroquine questions answeredTraveling, asthma, dishes, disinfectants and being contagiousMasks, lending books and self-isolatingExercise, laundry, what counts as soap — Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingHow to minimize your risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it, the right mask to wear.

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Updated 2 hours ago - Politics & Policy

Italy reports lowest number of new coronavirus cases since February

Italy’s aerobatic team Frecce Tricolori fly over Milan in Duomo Square on May 25. Photo: Francesco Prandoni/Getty Images

The Italian government reported 300 new cases of coronavirus on Monday, the lowest daily increase since Feb. 29.

Why it matters: Italy, the first country in Europe to implement a nationwide lockdown after emerging as a hotspot in March, appears to have finally weathered its coronavirus outbreak. Italy has reported nearly 33,000 total deaths, the third-highest total behind the U.S. and U.K.

Joe Biden makes first public appearance in over two months

Photo: Oliver Douliery/AFP via Getty Images

Former Vice President Joe Biden made his first in-person appearance in over two months on Monday to honor Memorial Day by laying a wreath at a Delaware veterans park, AP reports.

Why it matters: Biden, the Democratic Party's presumptive nominee, has taken the unprecedented step of campaigning from his home during the coronavirus pandemic, ever since canceling a rally in Cleveland on March 10.