The credit turmoil related to US subprime mortgages has
produced a liquidity crunch on both sides of the Atlantic. The
effect of this on the US-leveraged finance markets has been
more marked than on the European market. There are a number of
reasons for this. Firstly, the US pipeline for leveraged loans
is much larger than the European pipeline. It is estimated that
lead banks hold more than $300 billion in unplaced US lending
commitments compared with less than a third of this in Europe.
The US market has more exposure to single credits. This is
because of a growth in deal size. Chrysler, First Data, Alltel,
Clear Channel and TXU are leading examples. European credits
have also grown, but not to the same extent. Excluding the
€16.4 billion Boots transaction, which is thought to
represent around 10% of European buy-out deal volume for the
first half of 2007, the...