Fitch: Debt Capital Market Slowdown Curtails Refinancing Cliff Progress

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CHICAGO--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Bridging The Refinance Cliff, Volume IV -- Downside Casehttp://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656496

Loan refinancing activity and robust high yield bond issuance over the last several quarters has extended or diminished a significant portion of near-term maturities in the refinancing cliff, according to Fitch Ratings' new report 'Bridging the Refinancing Cliff, Volume IV'. Since 2009, approximately $325 billion of maturing debt was repaid or extended beyond 2015.

In particular, the market has been intensely focused on refinancing and extending longer dated maturities in the 2013 and 2014 timeframe through loan refinancing, amend-and-extend transaction and bond-for-loan takeouts. Approximately 78% of all amend and extend (A&E) transactions executed over the last 12 months have extended debt maturities in the 2013 to 2014 timeframe.

However, macroeconomic distress in Europe and lackluster economic progress in the U.S. has weighted on the U.S. debt capital markets over the last couple months, impeding efforts in further redistributing loan maturities. Since August 2011, loan refinancing, amend-and-extend transactions and bond-for-loan takeout volumes slowed considerably. As a result, only $48 billion of loans were extended in the third quarter beyond the 2015 versus the $148 billion that was extended beyond 2015 in the second quarter.

Given the amount of global uncertainty that could result in a further slowdown in capital market activity and the nearly $912 billion of loans scheduled to come due between 2012 and 2014, Fitch examined various downside scenarios and their individual impact on the refinancing cliff. In its analysis, Fitch found that below average volume levels are likely to have a minimal impact on the refinancing and/or extending 2012 loan maturities. However, difficulties in refinancing and extending maturities in the 2013 and 2014 time frame could occur if depressed activity levels persist.

The full report 'Bridging the Refinancing Cliff' is available at 'www.fitchratings.com' under the following headers:

Sectors >> CorporateFinance >> Leveraged Finance

Additional information is also available at 'www.fitchratings.com/usleveragedfinance'.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Fitch U.S. High Yield Default Insight -- Oct. 2011', Nov. 15, 2011;

--'U.S. Leveraged Finance Multiples EV-Aluator', Nov. 15, 2011;

--'U.S. Leveraged Finance Market Quarterly', Oct. 20, 2011;

--'Global Economic Outlook', Oct. 3, 2011;

--'Liquidity and Covenant Analysis for Large U.S. Leveraged Issuers', Sept. 30, 2011;

--'U.S. Leveraged Finance Stats Quarterly -- Second-Quarter', Sept. 27, 2011;

--'Fitch 50 -- Structural Profiles of 50 Leveraged Credits', July 20, 2011.

Applicable Criteria and Related Research:

U.S. Leveraged Finance Stats Quarterly -- Fourth-Quarter 2010

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=618145

U.S. High Yield Default Insight -- October 2011

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=655813

U.S. Leveraged Finance Multiple EV-aluator

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=654674

U.S. Leveraged Finance Market Quarterly: Third-Quarter Synopsis and Fourth-Quarter Preview

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=653178

Global Economic Outlook: Downward Revisions as Advanced Economies Stall

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=650289

Liquidity and Covenant Analysis for Large U.S. Leveraged Issuers -- U.S. Companies Sufficiently Positioned Despite Market Turmoil

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=652310

U.S. Leveraged Finance Stats Quarterly -- Second Quarter 2011

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651353

Fitch 50 -- Structural Profiles of 50 Leveraged Credits

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=646322

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Fitch RatingsBrian Bertsch, +1-212-908-0549Media Relations, New York[email protected]orDarin Schmalz, +1-312-606-2324DirectorFitch, Inc.70 W. Madison StreetChicago, IL 60602orMike Simonton, CFA, +1-312-368-3138Managing Director

Source: Fitch Ratings

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