The European leveraged finance primary and secondary markets had a moderate October. Loan issuance was €2.3 billion in October 2013, while high yield issuance was €5.3 billion for the month. Estimated inflows into European HY funds for October are estimated to be gigantic €1.32 billion, bringing the estimated year to date number to €4.87 billion. A slew of CLOs are expected to price before the end of the year. 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/1XD4wjvo9WE 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. Text
European Leveraged Finance Market Update
November, 2013
Sucheet Gupte - Director

2. European Market Trends
Text
• The European leveraged finance primary and secondary markets had a moderate October.
• Loan issuance was €2.3B in October 2013, while high yield issuance was €5.3B for the month.
• Secondary markets were up:
Leveraged loan markets were up 33 bps to close at 100.46;
HY markets were up 156 bps to finish 105.19.
• Estimated inflows into European HY funds for October are estimated to be a gigantic €1.32B,
bringing the estimated year to date number to €4.87B.
• The S&P European Leveraged Loan Index (ELLI) was up for October, with returns at 1.02%, slightly
below the 1.35% seen in September. This brings the YTD return to 7.78%.
• Just one CLO priced this month, Grosvenor Place 2013-1, a €361.55M vehicle from manager CQS.
• Default rates were markedly lower.

3. European Loan Flow Name Prices
101
99
Text
98
96
94
93
91
3/11
.
5/11
7/11
Source: S&P Capital IQ/LCD
9/11
11/11
1/12
3/12
5/12
7/12
9/12
10/12 12/12
2/13
4/13
6/13
8/13 10/13

4. European HY Bond Flow Name Prices
106
102
Text
98
94
89
85
81
3/11
.
5/11
Source: Bloomberg
7/11
9/11 11/11 1/12
3/12
5/12
7/12
9/12 11/12 1/13
3/13
5/13 6/13
8/13 10/13

5. ELLI Multi-Currency Loan Return
1.5%
October 2013:
+ 1.02%
September 2013: + 1.35%
Jan-Oct 2013:
+ 7.78%
Jan-Oct 2012:
+ 7.84%
Text
1.0%
0.6%
0.1%
-0.4%
10/12
.
11/12
12/12
1/13
Source: S&P European Leveraged Loan Index
2/13
3/13
4/13
5/13
6/13
7/13
8/13
9/13
10/13

6. Volume: New-Issue Loans vs. HY Bonds
18
Text
HY bonds
Loans
€billions
14
9
€5.3B
5
€2.3B
0
10/12
.
11/12
12/12
Source: S&P Capital IQ/LCD
1/13
2/13
3/13
4/13
5/13
6/13
7/13
8/13
9/13
10/13

7. Volume: PIK Toggle Notes
4
PIK notes
Text
PIK Toggle Notes
€billions
3
2
1
0
2006
.
2007
Source: S&P Capital IQ/LCD
2008
2009
2010
2011
2012
YTD 10/21/13

8. ELLI Default Rates – European Leveraged Loans
Default Rate by Principal Amount
Default Rate by Issuer Count
16%
16%
13%
13%
10%
10%
Text
6%
6%
3%
0%
2/09
.
3%
0%
2/09
2/10
2/11
Source: S&P Capital IQ/LCD
12/11
10/13
2/10
12/11
2/12
10/13

9. Themes To Watch For
Text
• The forward calendar for new M&A transactions is still anemic; however, investors
are flush with cash from a high level of repayments.
With PE backed issuers expected to file for their IPOs, that number seems likely
to rise.
• A slew of CLOs are expected to price before the end of the year.
However even with the pickup in new issue CLOs, there is still not enough to
replace existing CLOs.

10. Text
Text
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