Registration & breakfast
Panel: The direct lending outlook – how is private credit reacting to a downturn?
Private credit deals have increased in popularity over the past 10 years, but as the economic outlook weakens, interest rates rise and the price of liquidity increases, there may be signs of a squeeze on European lenders. Speakers on this panel will discuss:
- What is the deal pipeline for direct lenders given a dearth of M&A activity?
- Will banks return to the direct lending market? And what is the impact of increasing rates on private debt?
- What are sponsors' appetites for UK versus European financings? Are US sponsors looking at UK and European deals?
- How are leverage multiples affecting direct lenders?
Panel: Leveraging ESG strategies and reporting in direct lending
Private debt funds are increasingly focusing their efforts on ESG strategies, but there are still complexities related to measurement frameworks due to different lending structures, varying degrees of stewardship and engagement with management and private equity owners. Panellists will discuss:
- How are direct lenders tackling ESG strategies with portfolio companies?
- What measurement and reporting frameworks are being used and to what extent?
- How do LPs view ESG strategies given an economic downturn?
- How are private lenders leveraging loan terms to drive an impact agenda?
Networking coffee
Panel: Managing stressed and distressed lending positions
Rising inflation, energy price increases and squeezed household budgets are affecting portfolio companies leading to defaults on debt repayments. How will direct lenders manage their stressed and distressed debt positions in a downturn? This panel will discuss:
- Which sectors are more at risk of stress and distress?
- How are terms being eroded through EBITDA adjustments?
- How can direct lenders support company restructurings?
- What are the trends in covenant resets and defaults?
Panel: Going large-cap and club deals
Direct lenders are leveraging their positions and size to reinforce their positions in the large-cap lending space. As syndicated debt markets remain dislocated, European lenders are taking advantage of the opportunity to make large unitranche deals. This panel will discuss:
- How are terms and pricing evolving for unitranche deals compared to syndicated debt?
- Will banks return to the market given the higher interest rate environment?
- How are multi-jurisdiction deals being structured given different European regulations?
- What are the trends in ‘cov-lite’ financing?
Lunch
Panel: Regional focus - Southern Europe
Replete with dry powder from the past 24 months, direct lenders have routinely stepped in to provide private debt options in Southern Europe. One such example was Advent International’s EUR 430m floating rate note to partially finance its acquisition of Italian ingredients manufacturer, IRCA, but switched to a senior acquisition package provided by CVC Credit Partners as public credit markets turned. This panel will review:
- What is the deal pipeline in Southern Europe for direct lenders?
- What are the key issues for issuers and investors in the region?
- What are the trends in documentation in the region?
- What are the differences in the direct lending deal pipelines in Italy and Spain?
Case studies: Private credit take P2Ps
There has been a recent increase in the number of P2Ps in the UK over the last few years and increasing interest from credit funds and other alternative lenders to provide debt finance for these types of transactions. However, direct lenders have a few considerations to make which would not necessarily arise on bank-led financings. This case study will review:
- How does conditionality of funding limit direct lenders’ access to financing P2Ps?
- How can fund structures create complexity when financing P2Ps?
- How can due diligence be effectively done if there are significant numbers of lending entities?
- How does ‘The City Code on Takeovers and Mergers’ affect flexibility for private credit on P2Ps?
Networking coffee
Panel: Private equity outlook
After 10 years of bull market conditions, the first signs of decline are starting to show in the private equity industry with challenges around fundraising, portfolio company vulnerabilities in the face of an economic downturn and falling valuations on public markets. Since the last downturn, layers of leverage have also been built into the system with portfolio companies and funds carrying debt – what does this mean for direct lenders?
- Are cracks beginning to show by way of a slowdown in fundraising? Are LPs sticking with existing relationships creating a bifurcation of the PE fundraising market?
- Are ESG credentials a priority in the face of an economic downturn?
- What is the pipeline for portfolio company investments and what are the exit opportunities given depressed public market valuations?
- How are layers of leverage creating opportunities and risks for direct lenders?
Panel: Regional Focus – France
The appetite for direct lending deals in France can be demonstrated by France-based buyout firm Astorg’s acquisition of drug development company CordenPharma earlier this year, where banks were initially expected to provide financing. Instead, Astorg went with a €1.5 bn club financing from four private providers. This panel will review:
- What is the deal pipeline in France for direct lenders?
- What are the key issues for issuers and investors in the region?
- What are the trends in documentation in France?
- Will French banks return to the financing market in 2023?
Chair's closing remarks and networking drinks
Debtwire European Direct Lending Awards
Debtwire, the leading provider of leveraged capital markets data and intelligence, will be announcing the winners of the 2022 European Direct Lending Awards at a gala dinner at The Savoy in London on the 18th May.
The awards ceremony will take place after the Direct Lending conference and registration for the gala dinner is separate to registration for the conference. Click here for more information.
Confirm cancellation
An error occurred trying to play the stream. Please reload the page and try again.
CloseSign-up to join the ION Analytics Community to:
- Register for events
- Access market insights
- Download reports