Issuance in the primary hit a post credit-crunch high in May, while secondary markets were down. CLO issuance was promising, with more in the pipeline, although new EBA directives threaten to hinder issuance going forward. More spread/yield compression is expected going forward, as issuers play loan and bond investors against each other in search of best terms. Check out LCD's new, free web sites, LeveragedLoan.com and HighYieldBond.com http://www.leveragedloan.com http://www.highyieldbond.com/ * Job postings * Online Loan Market and High Yield Primer * News and analysis * Market Stats Video presentation of these slides: http://youtu.be/9Ub1tqpYfcM Connect with LCD Facebook: http://www.lcdcomps.com/facebook Like LCD on Facebook for monthly analysis on LBO/Private equity stats, as well as Default/Restructuring analysis. LinkedIn: http://www.lcdcomps.com/linkedin There are over 10,000 market contacts in LCD's Leveraged Loan Group Twitter: http://www.twitter.com/lcdnews News, commentary, other leveraged finance info Web: http://www.lcdcomps.com Contact: anna_cini@sandp.com

1. European Leveraged Finance Market Update
June, 2013
Sucheet Gupte - Director
Text

2. European Market Trends
Text
• The S&P European Leveraged Loan Index (ELLI) finished the month up 0.11%.
• Loan issuance was €8.7B in May 2013, while HY issuance was €9.0B.
• Secondary markets were down:
loan markets were down 17 bps to finish the month at 100.41;
high yield markets were down 139 bps to finish the month at 103.24.
• Estimated inflows into European HY funds was €975M for May, versus €555M for April.
YTD inflows are almost €4B.
• Default rates stayed roughly the same.

3. 91
93
94
96
98
99
101
3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13 5/13
.
European Loan Flow Name Prices
Text
Source: LCD - Leveraged Commentary & Data

4. .
81
85
89
94
98
102
106
3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13
European HY Bond Flow Name Prices
Source: Bloomberg
Text
5/13

5. 0%
0.4%
0.8%
1.1%
1.5%
4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 2/13 3/13 4/13 5/13
.
ELLI Multi-Currency Loan Return
Text
May 2013: + 0.11%
April 2013: + 0.88%
Jan-May 2013: + 3.19%
Jan-May 2012: + 4.63%
Source: S&P European Leveraged Loan Index

6. .
0
5
9
14
18
4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12 12/12 1/13 2/13 3/13 4/13 5/13
Volume: New-Issue Loans vs. HY Bonds
HY bonds
Loans
€billions
Text
Source: LCD - Leveraged Commentary & Data
€9B
€8.7B

7. 0%
3%
6%
10%
13%
16%
2/09 2/10 12/11 2/12 5/13
0%
3%
6%
10%
13%
16%
2/09 2/10 2/11 12/11 5/13
.
ELLI Default Rates – European Leveraged Loans
Default Rate by Principal Amount Default Rate by Issuer Count
Text
Source: LCD - Leveraged Commentary & Data

8. Themes To Watch For
Text
• Given the buoyant equity markets, expect further IPOs from some sponsor-led companies, allowing them to
return cash back to their LPs.
• YTD CLO issuance at €1.34B, with still a few more managers and vehicles on the forward pipeline.
However, new directives from the EBA could hinder new CLO issuance.
• Further spread / yield compression is expected, as issuers use capital markets to essentially play loan
investors against bond investors to get the best terms possible.
• Global co-mingled funds being launched, combining loans and high yield bonds, with a focus on both US and
Europe.

9. pause
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