The European leverage finance market had a mixed month as a Greek exit from the Eurozone didn’t look implausible and there was a increased pressure on Spanish and Italian sovereign costs. In this month's analysis: * Loan flow name prices * High yield bond flow name prices * ELLI loan returns * New-issue loans vs high yield bond volume * ELLI default rates, European leveraged loans * Trends for the months ahead Check out LCD's new, free web site, LeveragedLoan.com http://www.leveragedloan.com * Leveraged finance job postings * Online Loan Market Primer * LCD News * Market Stats Connect with LCD Facebook: ‪http://www.lcdcomps.com/facebook Like LCD on Facebook for monthly analysis on LBO/Private equity stats, as well as Default/Restructuring analysis. LinkedIn: ‪http://www.lcdcomps.com/linkedin There are some 8,500+ market contacts in LCD's Leveraged Loan Group Twitter: ‪http://www.twitter.com/lcdnews News, commentary, other leveraged finance info Web: ‪http://www.lcdcomps.com YouTube: http://youtu.be/beqRwq5u4h4

1. Text
European Leveraged Finance Market Update
June, 2012
Sucheet Gupte - Director

2. European Market Trends
Text
• Mixed month for leveraged finance, a “Grexit”
not looking implausible
• Loan issuance hit a ten-month high of €5.3B
• Both loan and high yield bonds bids fell in
the secondary
• ELLI finished up just 0.1% for month of May
• Default rates were up

3. European Loan Flow Name Prices
100
99
97
96
Text
94
93
91
1/11 2/11 4/11 5/11 6/11 8/11 9/11 10/11 12/11 1/12 2/12 4/12 5/12
. Source: LCD - Leveraged Commentary & Data

4. European HY Bond Flow Name Prices
106
102
98
94
Text
89
85
81
1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12
. Source: Bloomberg

5. ELLI Multi-currency Loan Return (monthly)
3.0%
May 2012: + 0.10%
Text April 2012: + 0.26%
Jan-May 2012: + 4.63%
Jan-May 2011: + 5.56%
1.8%
0.5%
(0.8%)
(2.0%)
3/10 5/10 7/10 9/10 11/10 1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12
. Source: S&P European Leveraged Loan Index

6. New-issue: Loans vs. HY Bonds (monthly)
12
HY bonds
Text
Loans
9
€billions
6 €1.5B
3
€5.3B
0
3/11 4/11 5/11 6/11 7/11 8/11 9/11 10/11 11/11 12/11 1/12 2/12 3/12 4/12 5/12
. Source: LCD - Leveraged Commentary & Data

7. ELLI Default Rates – European Leveraged Loans
Default Rate by Principal Amount Default Rate by Issuer Count
16% 16%
13% 13%
10% 10%
6% Text
6%
3% 3%
0% 0%
2/09 3/10 4/11 5/12 2/09 2/10 2/11 5/12
. Source: LCD - Leveraged Commentary & Data

8. Looking Ahead
out
• Increased volatility with most high yield market
players sitting on the sidelines
• Outflows continue from high yield bond funds
• Issuers will continue to seek to tap the US market
for both loans and bonds
• The flow of amend to extend requests from issuers
will continue

9. Text
European Leveraged Finance Market Update
June, 2012
Sucheet Gupte - Director

10. Text
Copyright 2012 Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
No content (including ratings, credit-related analyses and data, model, software or other application or output therefrom) or any
Text
part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a
database or retrieval system, without the prior written permission of S&P. The Content shall not be used for any unlawful or
unauthorized purposes. S&P, its affiliates, and any third party providers, as well as their directors, officers, shareholders, employees
or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P
Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the
Content, or for the security or maintenance of any data input by the user. The Content is provided on an "as is" basis. S&P
PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS,
SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE
CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be
liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs,
expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with
any use of the Content even if advised of the possibility of such damages.
Credit-related analyses, including ratings, and statements in the Content are statements of opinion as of the date they are
expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment
decisions. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not
be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or
clients when making investment and other business decisions. S&P’s opinions and analyses do not address the suitability of any
security. S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes to
be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any
information it receives.
S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity
of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P
business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information
received in connection with each analytical process.
S&P may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of
pause
securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are
made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and
www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third
party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.