Powered by

August 2, 2017

Written by Dealogic Fixed Income and Fees Research

Higher share of refinancing and amendment revenue

Revenue generated from non-IG debt in EMEA and the Americas so far this year stands at $9.5bn, the highest YTD figure since 2014 and up by 26% year-on-year. Refinancings and amendments, which dominated volume for fixed income so far this year, accounted for 22.8% of the total wallet for non-IG deals, and their revenue increased by 36% since 2016 YTD. The market is currently in the midst of a refinancing cycle (with activity reaching 1,161 deals in 2017 YTD), which has been accelerated by the fall in both coupons and margins by 8.5% and 12.1%, respectively. In the current environment, outstanding debt will provide ample fee-generating opportunities.

Debt and opportunity concentrated in telecom

The maturity wall for non-IG debt will peak in 2021, which translates into $543.7bn of debt coming due that year. Of the total debt due to mature before 2027, loans account for 54.8% and bonds 45.2%. Outstanding debt is concentrated around three industries: telecom, oil & gas, and healthcare, with a total of 32.9% by volume. In parallel, the top five non-IG fee payers since 2015 have been within the telecom, technology, and healthcare sectors. Outstanding debt from these top five fee payers peaks a year later than for all outstanding debt, and together, they account for 7.3% of all debt due to mature in 2022.

Revenue potential from the maturity wall

Based on all outstanding debt, the top five fee payers alone are expected to generate $2bn+ in fees. Among these top five, telecom companies lead the way with an expected $1.3bn in fees. In particular, Next LP accounts for 41.2% of the projected fee pool from the top five corporates. On a deal level, notable fee-generating opportunities to watch out for are Numericable-SFR’s $5.2bn high-yield bond due in 2026 and Altice’s $10.6bn leveraged loan due in 2022.


Data source: Dealogic, as of August 1, 2017

Learn more about LevFin Manager

More in Fixed Income:

  1. Report

    KKR: A rising star in leveraged loans

    July 2017

  2. Report

    Key trends that shaped the markets in H1 2017

    July 2017

  3. Report

    Moody's and investors wary of China's rising debt

    June 2017

  4. Video

    Dealogic and Quinlan & Associates Webinar: Sumo-sized lending - Japanese megabanks go global

    June 2017