The discussion turned to the post- CLO phase of senior loan issuance, which the table generally agreed would come from private equity firms looking to place the estimated US$300 billion in capital they raised before 2008, but have yet to invest. Scott Page: As BASEL 3 comes in, banks will not be able to fund corporates in the same way. The support will need to come in a capital market form. We’re not talking about private equity sponsors buying bank loans, but private equity sponsors buying companies and using bank loans to finance the purchase. Finally, the table dealt with the supposed ‘wall of maturity’ of bank loans, struck during the height of the 2006-07 cheap money boom, and due to refinance across 2012-13. Sucheet Gupte (associate director, Leveraged Commentary & Data, Standard & Poors): In the global leverage loan market, you had close to US$796 billion, out of which you’re talking about US$600 billion was in the US.

At the end of the first quarter 2010, that global number comes down to US$702.3 billion, and the US market has come down to around US$540 billion. And in terms of the wall of maturity, what you’ve seen in the US is the high-yield market’s been very active. You’ve had quarterly repayment rates back up to close to 6 per cent in the US, based on our leverage loan index. A lot of highyield managers do bond-for-loan takeouts, where you issue bonds, take out loans. We’ve had a couple of IPOs. You’ve also had a lot of demand for amend-to-extend, where you are just lengthening out the maturities. That’s something that’s always happened in the market. Scott Page: I view the ‘wall of maturities’ as a journalistic creation. At any point in any market’s history that has maturities, you could project out maturities and say there’s a wall. I think it’s just intrinsic, and yet everyone has focused on it. I’m not saying it’s a non-event, I’m just saying it’s kind of a logical necessity. I’d just focus on the fact that there’s been enormous creativity – high-yield bonds, amendto- extends, equity issuances, companies being sold, you know, all of those things will be employed over the next few years. The real wall’s 2014. It’s a long time. As long as capital markets stay open, it will be addressed.

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