Leveraged Lending Solutions

With a sustained economic downturn and its severe consequences, banks will require a detailed analysis of ‘stress scenarios’ for leveraged loans.

Given a sustained global economic downturn, we expect the default rate for leveraged loans to increase significantly. Banks will need to strengthen their current monitoring framework due to the higher credit risk in these portfolios. Renewals, refinancing, waivers, maturity extensions and amendments requests will increase, and banks will be required to ensure that risk is factored in appropriately.

Navigate this crisis with the power of credit insights and improved monitoring framework.

Benefits and Impact

Acuity Knowledge Partners’ Leveraged Lending Solutions Suite

Underwriting / re-underwriting

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Underwriting / re-underwriting

  • Financial model updates with projections

  • Detailed free cash flow analysis with de-leveraging trajectory

  • Base case, downside case, debt repayment analysis

  • Sensitivity analysis

  • Liquidity and working capital analysis

  • Enterprise Valuation (EV) analysis

Credit Performance update

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Credit Performance update

  • Financial model updates

  • Revisit Projections

  • Review of base case, downside case, debt repayment analysis

  • Covenant headroom trends

  • Liquidity and debt maturity trends

  • Refresh Enterprise Valuation (EV)

  • Tracking credit events and impact analysis

  • Annual and quarterly credit reviews

Early Warning Mechanism

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Early Warning Mechanism

  • Build triggers to track performance at portfolio level

  • Sector level reporting to track performance

  • Variance analysis on actual performance vs. original projections and borrower budget

  • Covenant headroom trends and analysis

  • Heat map analysis

  • Actual exposure vs. hold limits

What we have done

Leveraged Loan monitoring for a top five bulge-bracket firm
What we are proud of

200+

leveraged loans

$12bn

loan portfolio monitored

Our perspective on Leveraged Lending Solutions

post page Blog
Leveraged Lending & CLOs – Asset managers reduce riskier exposure and focus on safety

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