Update on the Leveraged Loan Market  By Brad Hamner, GE Capital Markets

Market Dislocation   After a sustained period of rather low volatility in the leveraged loan market, the second half of 2007 was a key turning point. From 2002 through early 2007, the market for securitizations grew at a furious pace. The development of a variety of structured credit products during this time helped to distribute risk and therefore decreased borrowing costs by narrowing credit spreads. However, as mortgage defaults increased, short-term funding for structured finance products evaporated and many of these vehicles were forced to either deleverage or liquidate. After initially starting in the subprime market, the liquidity problems eventually spilled over to other asset classes, including the CLO (“Collateralized Loan Obligation”) market, and eventually snowballed into a full-blown crisis. Since this dislocation in the credit markets, CLO’s share of the institutional investor base has declined from 63% to 40%. Additionally, hedge funds, distressed funds and high yield funds have played an increasingly active role, with their market share rising from 21% to 36%, as have banks which now account for 13% of the market.

Shifting Institutional Investor Base

Source: Standard & Poor’s LCD (3/31/2008)

GE Antares Awarded Middle Market Lender of the Year

GE Antares Capital was named Middle Market Lender of the Year by Buyouts magazine. This award recognizes the lender that best serves middle market private equity firms with timeliness, flexibility, or creativity in financing. In selecting GE Antares as this year’s winner, Buyouts cited the firm’s constant, reliable presence in the middle market, top market position, its partnership with Allied Capital to provide a unitranche lending product, and the increasing commitment to the middle market through GE’s acquisition of Merrill Lynch Capital. 

> Read Buyouts Article

Here’s a case study on how GE’s know-how is helping drive growth for a middle market company

ACFC from GE Commercial Finance Delivers Real World Experience in China

Through the Access GE Program, GE helped Justrite cut six months off its learning curve on doing business in China by:

•      Tapping into GE’s internal network of experts to provide useful information regarding sourcing from, and selling into, China

•       Facilitating discussions with Access GE’s Chinese-national, located in Shanghai, enabling Justrite to gain insights into cultural differences and economic development zones within China.

When it comes to helping your business grow, GE Capital Solutions, Franchise Finance delivers.

GE Capital Solutions, Franchise Finance

GE Capital Solutions, Franchise Finance (GEFF) is a leading lender for the franchise finance market via direct sales and portfolio acquisition. With over 20 years of experience and $13B in served assets, GEFF serves over 5,000 customers and more than 22,000 property locations, primarily in the restaurant, hospitality and branded beverage industries. GEFF offers customers access to capital with a menu of products featuring flexible structuring, including financing for acquisitions, refinancing, construction of new units and remodels for single- and multi-unit operators/chains. More information is available at www.gefranchisefinance.com or by calling your GE Antares deal professional.