Loan issuance was down at €3B in February, while high yield issuance was steady at €7.4B. Secondary markets are up. Repricings are back on table, February’s tally was the highest number of purely European repricings in any month on record. Europe had its first new arbitrage CLO pricing since the crisis in 2007. Check out LCD's new, free web sites, LeveragedLoan.com and HighYieldBond.com http://www.leveragedloan.com http://www.highyieldbond.com/ * Job postings * Online Loan Market and High Yield Primer * News and analysis * Market Stats See our video presentation: http://youtu.be/RLoaN0plmOM 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 over 10,000 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 Contact: anna_cini@sandp.com

1. Text
European Leveraged Finance Market Update
March, 2013
Sucheet Gupte - Director

2. European Market Trends
Text
• Loan issuance was €3.03B in February 2013;
high yield issuance was €7.4B .
• Estimated outflows out of European HY funds was €220M for
the four weeks ending February 28th.
• Secondary markets were up:
loan markets went up 5 bps to finish the month at 99.47;
high yield markets were up 19 bps to finish the month at 102.3.
• The S&P European Leveraged Loan Index (ELLI) finished the month up 0.4%.
• Default rates were mixed -- default rates by principal amount rose;
default rate by issuer count fell.

3. European Loan Flow Name Prices
100
99
Text
97
96
94
93
91
2/11 4/11 6/11 8/11 10/11 12/11 2/12 4/12 6/12 8/12 10/12 12/12 2/13
. Source: LCD - Leveraged Commentary & Data

4. European HY Bond Flow Name Prices
106
102
Text
98
94
89
85
81
2/11 4/11 6/11 8/11 10/11 12/11 2/12 4/12 6/12 8/12 10/12 12/12 2/13
. Source: Bloomberg

5. ELLI Multi-Currency Loan Return
2.5%
February 2013: + 0.40%
Text January 2013: + 1.18%
Jan-Feb 2013: + 1.59%
Jan-Feb 2012: + 3.34%
1.9%
1.2%
0.6%
-0.1%
12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/1211/1212/12 1/13 2/13
. Source: S&P European Leveraged Loan Index

6. Volume: New-issue Loans vs. HY Bonds
15
HY bonds
Text Loans
11
€billions
8
€7.4B
4
€3.03B
0
11/1112/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/1211/1212/12 1/13 2/13
. 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 2/10 2/11 12/11 2/13 2/09 2/10 12/11 2/12 2/13
. Source: LCD - Leveraged Commentary & Data

8. Themes to watch for
Text
• Repricings are back on table, as issuers take advantage of strong demand. February’s
tally was the highest number of purely European repricings in any month on record.
• Along with repricings, some sponsors are tabling dividend recap deals to take
advantage of investor demand.
• Still strong demand for high yield bonds.
• Bond for loan-take-outs will continue to keep pace as issuers address their maturity
concerns.
• Cairn priced its €300.5M CLO, the first new arbitrage CLO in Europe since
the crisis. There are signs about pricing new CLOs.
• There is renewed optimism about M&A.

9. Text
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