Large Bank Supervision Forum 2023
Origination Process and Participants
Hires arranger/agent/professionals to assist in raising capital Capital raising may include secured loans and junior capital May be simultaneously raising equity capital Structures the facilities Negotiates documents Information disclosure (book) Administrative tasks Invites/solicits lenders (book running)
2022 US Leveraged Loans Top Lead Arrangers by Market Share 1 BofA Securities JP Morgan Wells Fargo Citi Truist Securities Barclays Goldman Sachs PNC Financial Services Group Morgan Stanley RBC Capital Markets Mitsubishi UFJ Financial Group BMO Capital Markets Citizens Financial Group US Bancorp Deutsche Bank
Borrower (Issuer)
Bank (Agent or Arranger)
Asset managers and IBs CLOs Institutions Retail mutual funds Banks
Lenders (aka Assignees or Investors)
1 Source: Bloomberg; data sorted by total volume. Data as of December 31, 2022
For financial professional or qualified institutional investor use only. Not for inspection by, distribution or quotation to the general public.
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Key Features, Types and Structures of Credit
Term Loans
Senior secured loans with five to seven-year maturities Floating Rate Average Life 3-4 years due to refinance or other event Generally have Excess Cash Flow recapture provisions
Term Loan A
Fully amortizing – amortization may be back-ended
Term Loan B
Minimal amortization
Cross collateralized, cross defaulted, same public debt rating as Term Loan A
Revolving Lines of Credit
May be asset based
Provides ability to draw, repay, draw over multi-year period Multiple structures and options, including terming-out Uncommitted credit facilities (can be term loans or revolvers) Access subject to covenant compliance and market demand for additional loans Rights of second lien lenders are subordinated to rights of 1st lien lenders – generally inappropriate for commercial banks
Guidance Line for Acquisition (aka “Greenshoe”)
Second Lien Loans
For financial professional or qualified institutional investor use only. Not for inspection by, distribution or quotation to the general public.
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