As the markets improved into the second quarter, the banks got a lot of those legacy commitments off of their books, freeing them to do more originations.

Jeff Nassof

Categorized in : Company News

The market was firing on all cylinders in the second quarter, there were plenty of new-money loans from both corporate M&A and leveraged buyouts, and it looks like more to come given the relaxed regulatory environment and strong stock market.

For investment grade companies, it's still a very strong M&A environment – stock prices are high, so sellers are willing to sell, and buyers are willing to bid their stock to get assets.

Debt financing is cheap, so that's not really any inhibitor to financing a big deal.

The big picture fundamentals are still in place: the low interest rates and the big investor demand for yield.

When banks have big blocks of commitments on their books that they can’t sell it really inhibits their ability to commit to new financing.

The first quarter was obviously pretty horrible, similar to what happened a year ago when oil started falling, it wasn't a problem that stemmed from leveraged finance deals themselves, but more of an external macro shock.

mergers-acquisitions