OK, it is not quite as grim as some banking lawyers feared at the start of September. The leveraged finance market is creaking back into life, at least compared with the total shutdown of recent weeks. October saw some debt moved on two benchmark leveraged buy-outs (LBOs) – First Data in the US and Alliance Boots in Europe – even if the banks have had to offer a lot of concessions and only move a fraction of the total. But moving again it is, while credit spreads have begun to again narrow both in the corporate bond and money markets, easing the chronic liquidity squeeze that under-pinned the gloom.
As such, deal lawyers are hopeful that the market will bounce back in the new year, or at least get a bit further off the ground.
