Select Committee on Treasury Written Evidence


  The charts below illustrate the growth in the leveraged finance market in recent years. The first chart covers the growth in the European LBO market, illustrated by total LBO deal volumes—showing in excess of a six fold growth since 2000.

  Source: S&P, LCD News.

  To complement this, the growth in the average LBO deal size across Europe is outlined below, with a doubling in average LBO size since 2003.

  Source: S&P, LCD News Weekly.

  The growth in the number of institutional investors that participate in the leveraged loan market is shown below, from a small number in 2000 to over a hundred separate institutional investors now (not including hedge funds) with two hundred and seventy five different investment vehicles (most institutional investors create a number of investment vehicles).

  Source: S&P, LCD News.

  The growth in importance of the institutional investors as providers of debt in these deals compared with banks, is clearly illustrated below, with the percentage of the debt provided by banks falling from 70%+ in 2003 to around 35% today.

  Source: S&P, LCD News.

June 2007

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Prepared 22 August 2007