Where Are We Headed?
Several of us spent some time at the annual ACG business conference in Los Angeles this week. Having attended this conference for the past few years, it was nice to see a bit more optimism in the crowd this time than, say, last year and the year before.
I was particularly interested to hear a panel of lenders talk about what they think the loan market will be like in the coming months. Everybody agrees that we're not back to where things were in 2005-2007 (and in some ways, that could be a good thing). Still, things definitely seem to be loosening up a bit, and there seems to be - for lack of a better term - cautious optimism about the future of the lending world. We've been seeing it in our practice here, and so have the lenders on the panel.
One of the panelists mentioned that more lenders are getting back in the game, particularly CLO's. Another described the general trend of leverage levels moving slowly up, and pricing moving down. There's also some loosening of terms and structure -- some of us are even seeing dividend recap deals again. As usual, the middle market remains more active than the upper end.
Predicting the future is really tough, though. Some economists think we're headed for a double-dip. Others think we can ride it out. Lenders see some opportunities in refinancing credit facilities that will mature in 2011 and 2012, and in expected (hoped for, anyway) expansion of the acquisition market.
What do you think the next few months will look like?
