Influential debt advisers and lack of an aftermarket are
driving differences between Europe’s version of
term loan B (TLB) and its US counterpart.
While US TLB is based on the originate-to-distribute model,
Europe’s institutional investors are investing for
the life-cycle of the loan, meaning they conduct a thorough
credit analysis before lending.
It signals the market’s maturation, proving
it’s not simply importing terms and structures
wholesale from across the Atlantic. It’s also
creating a more flexible asset class.
"I don’t think we can safely say that there is
a particular term loan B product or particular direct lending
product – they are predominantly credit driven and
often very bespoke," said Phillip Slater, partner at
Morrison & Foerster in London, at a joint LMA and
LSTA event in London last week.
While their foundations are the same – high yield
bond-style terms – institutional lending...