Borrowers and lenders are seeking new opportunities in the face of growing market volatility

White & Case Debt Explorer | Term loan A debt is back in the spotlight as borrowers look for financing alternatives in an increasingly volatile institutional loan market

High yield bond markets see issuance slow as borrowers and investors step back from new deals due to macroeconomic headwinds and geopolitical uncertainty

White & Case Debt Explorer | Rising inflation and climbing interest rates have slowed leveraged loan activity in Europe and the US, while COVID-19 restrictions in China dampened demand in Asia-Pacific.

We highlight the key UK & European M&A trends in H2 2021 and H1 2022, and provide our insights into the outlook for M&A moving forward.

UK & European Financial Services M&A: Sector trends H2 2021 | H1 2022 — Banks

European Leveraged Finance Client Alert Series: July 2022

The European non-performing loan landscape looks very different in 2022, with large deals driven by urgent government regulation supplanted by small but steady opportunities.

What does the future hold for NPLs? There's still plenty of business to be done, but buyers and sellers alike will need to change tack to get the most from the available opportunities.

Europe's banks continue to defy expectations—not a single country saw its banking sector’s NPL ratio increase in 2021, with the vast majority reporting an improvement.

While the spike in bad debt and subsequent tsunami of NPL and non-core loan deals that was anticipated due to COVID-19 did not materialise, the increasingly volatile market trends may lead investors to discover new and unexpected opportunities.

Despite a decline in overall bond and loan issuance in the Latin American region, ESG-linked debt issuance thrived in 2021—and looks set to continue in the months ahead  

After weathering pandemic-related disruption early in 2021, Latin American loan and bond markets remained open for business, with bonds leading the way

Vehicle sales rebounded strongly following lockdowns, but Europe’s automotive companies confront a period of significant change as governments phase out combustion engines, supply chain constraints bite and the impacts of events in Ukraine are felt  

Real estate sector headwinds stifled high yield markets in the Asia-Pacific region, but loan issuance went from strength to strength to post double-digit gains  

Leveraged loan and high yield bond markets in Western and Southern Europe saw a major resurgence in the past 12 months, driven initially by refinancing, followed by almost unprecedented M&A and buyout issuance, and setting the stage for, on balance, a productive year ahead  

Financial stimulus and sustained investor appetite for yield have seen US CLO issuance scale record heights  

Large double-digit gains in US loan issuance meant leveraged finance markets ended 2021 with a bang and set the stage for robust activity in 2022  

Islamic finance providers have been slow to make the transition away from LIBOR, as the replacement benchmark rates pose challenges in the context of Sharia compliance

Issuers are tapping institutional loan markets for add-on debt at a rapid pace as private equity firms turn to buy-and-build strategies to lower entry multiples and accelerate deployment  

Following a year of healthy activity, M&A deals in the pipeline are set to sustain leveraged finance issuance in the pharmaceutical, medical and biotech sector in the months ahead.

European leveraged finance markets rebounded in the past 12 months, driven  by enthusiastic refinancing activity and a resurgent M&A marketplace, setting the  stage for a healthy year ahead

A flurry of activity saw year-on-year leveraged finance issuance in Europe hit new heights in 2021. Can this pace be maintained in the months ahead? Based on pipeline activity and investor appetite for growth, the answer seems to be: Yes.