Navigating the leveraged finance tightrope – Power steering credit governance to be future-ready

Event Summary

The outlook for the leveraged finance market remains uncertain as we enter 2023, after a c.70% fall in issuance levels in 2022 on the back of tightening credit markets, global recessionary pressures, and an uncertain inflation trajectory. Lenders are diligently monitoring leveraged portfolios, as they expect speculative-grade default rates to surpass the long-term average of 4.1%.

How will the leveraged finance market perform in 2023, and what role will robust credit governance play in improving bank margins and navigating uncertainty?

Acuity Knowledge Partners is delighted to bring together a number of experts from the leveraged finance sector to discuss the key themes in the sector. Join us as the panellists discuss what their key priorities are for 2023 and how they plan to minimize the impact of the impending rise in default rates and lower loan volumes in 2023.

Key Takeaways

• The impact of worsening credit conditions across sectors, including stagflation-sensitive sectors

• Expected default rates across rating classes and the subsequent increase in the number of fallen angels

• How banks are positioned to weather the downturn given their capital buffers and their ability to accommodate higher loan loss provisions

• How increasing regulatory requirements are changing risk assessment practices across the sector

• How banks are reimagining their operating models to build robust credit risk governance processes

• The role of technology-enabled solutions in improving the credit assessment/monitoring practice

Panelists

David Martens

Managing Director and Head of US Portfolio Management

Natixis CIB

Jeff Kalinowski

Senior Vice President Leveraged Finance Portfolio Management

KeyBanc Capital Markets

Manfred Affenzeller

Co-Head of U.S. Leveraged Finance

Deutsche Bank

John Lucchese (Moderator)

Senior Director

Acuity Knowledge Partners