Healthcare Industry Insights

April 2021 - In our update on the healthcare sector, access the latest market updates for pro rata bank loan, institutional loan, and high yield primary loan markets.

Pro rata bank loans

• Despite strong bank demand, volume in the pro rata bank market remains muted, flat with volume for the same period last year.
• Amend & extends and acquisition-related upsizes are benefiting from strong lender reception, as banks are becoming increasingly willing to stretch on pricing and structure to drive loan growth, particularly for existing credit relationships.

Institutional loans

• See why YTD new issue volume is up nearly 145% year-over-year, and April was poised to be the most active month in the last five years
• While activity to date has been comprised of a mix of acquisition-driven and opportunistic financings, deals in Q2 have begun to tilt toward more M&A transactions. April was very active with 13 Healthcare transactions coming to market, representing over $10.8 billion of total volume, use of proceeds comprised a mix of M&A-driven deals and refinancings.

High yield primary market

• The high yield primary market continues to benefit from favorable monetary policy, solid inflows, and yield/spread compression
• High yield primary volume in April totaled over $50 billion, surpassing the previous April record, with refinancing dominating use of proceeds as issuers take advantage of strong market conditions
• YTD new issue volume has surpassed $200 billion, versus ~$110 billion for the same period last year, with new issue pace now almost double that of last year’s pace
  Expect a slightly slower new issue market in May with a more robust M&A calendar supplementing slower debt refinancing flow