Something happened last week that should have boosted leveraged loan primary issuance - or at the very least been a catalyst for change. It was the launch of a $7 billion structured investment vehicle (SIV), a deal led by Goldman Sachs.
If broader economic conditions were better, a successful SIV launch could have demonstrated a demand for paper, but "the market is not so simple that one successful SIV can boost investor confidence," said Neal Schweitzer, a senior vice president in Moody's Investors Service's syndicated loan ratings group. "As some suggest, like Fed Chairman Ben Bernanke, the volatility in this market will be around for a while. Debt investors are looking for more stability in prices and consistency. Investors are telling us, 'Show me eight to 10 [funds like that] with some consistency in closing and pricing and perhaps I'll stop reacting to strictly technical aspects.'"