Goldman Sachs Sees Leveraged-Loan Issuance Picking Up in Europe

Goldman Sachs Remains Bullish on Leveraged Loan Market

European leverage-loan issuance is showing signs of a rebound due to a pickup in acquisitions and speculation that interest rates will rise, according to Goldman Sachs Group Inc.

“There are good signs coming,” Michael Marsh, Goldman’s European head of high-yield and leveraged loan capital markets, said in an interview with Bloomberg TV’s Manus Cranny at a conference hosted by the bank in London. “We are starting to see the market grow through M&A, but also through inflow of capital.”

Last week was the busiest this year in Europe’s leveraged-loan market, aided by demand for merger-and-acquisition financing, Marsh said. Investors have begun to turn to leveraged loans because they are floating-rate products that let holders benefit from higher interest rates, he said.

The activity last week may not be enough to prevent this being the quietest third quarter in the euro leveraged-loan market since 2012, based on data compiled by Bloomberg. Concerns about economic growth and uncertainty following the U.K.’s vote to leave the European Union have also caused year-to-date issuance to drop 20 percent to 54 billion euros ($61 billion), the data show.

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