TRLPC: Jefferies jumps back to the top of LBO league tables

Thu Jul 16, 2015 10:49am EDT
 
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By Jonathan Schwarzberg

NEW YORK, July 16 (Reuters) - Jefferies moved back to the top of the U.S. leveraged buyout league tables in the second quarter after a one quarter hiatus from the spot, according to Thomson Reuters LPC data, as U.S. regulators' leveraged lending guidance continues to reshape the market.

The guidelines, which were implemented in 2013 by the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp, are designed to curb risky lending by banks that could pose a systemic risk and are allowing unregulated lenders to pick up business from banks.

Jefferies is not overseen by these regulators and is therefore able to lead highly leveraged loans, helping the firm top Thomson Reuters LPC league tables for leveraged buyouts for the second time in three quarters.

"Since the regulatory environment has shifted, Jefferies has gotten more calls than they would have previously," said a senior banker. "There's been an opening for them, and they have taken advantage of it."

Leveraged buyout financing volume has been muted this year as cash-rich corporate buyers have consistently outbid sponsors for targets.

First half leveraged buyout financing totaled just $30.8 billion, which is down 40 percent over last year's first half number of $51.4 billion.

Second quarter volume, in particular, was slow at just $11.4 billion, down 62 percent from $30.1 billion in the same quarter of 2014, which allows for bigger jumps in league tables.

Jefferies served as a bookrunner on $2.3 billion worth of deals in the second quarter, giving it a market share of 20 percent, double Morgan Stanley, the second leading bookrunner.   Continued...