About the conference

The debt markets are changing rapidly. In our 2016 UK Mid-Market Debt event GPs met potential lenders, and advisers met clients - not competitors. They came together to get a comprehensive overview of today's debt markets in a day filled with panel debate, interactive Q&A and live polling, not to mention unrivalled networking in a full day packed with content.

View the 2016 event infographic

Register your interest in the UK Mid-Market Debt 2017 conference

To become a sponsor of this unique conference contact us / +44 (0)20 7045 7600

2016 Programme

9am GP-Only Breakfast Reception

What GPs really think: roundtable debates from the borrower's perspective 

9:30 Registration 

9:50 Welcome

10:00 The Brexit effect   

How is Britain's vote to leave impacting UK leveraged finance?

10:35 Devil’s Advocate – Debt

A quick fire take on the most contentious issues in acquisition finance  

  • Differentiation amongst senior lenders is all but non existent
  • Synthetic unitranche is neutralising the benefit of multi providers
  • Weak covenants and non-amortisation will create a mid-market bloodbath at the first sign of downturn
  • BoSIF Mark ll? Unitranche players threaten to trample on the toes of private equity 

11:10 Done Deals Live: Fintrax

An investigation of the largest ever UK bilateral unitranche lend

11:25 Tax issues affecting credit funds

11:30 Coffee 

11:50 Spoilt for choice?

With more debt options than ever before, how should GPS be approaching deal financing? Today a £150m deal can be financed with bonds, a bilateral bank loan, a direct lend unitranche deal, a first loss/second loss structure, a club deal and potentially even a small syndicated deal. Each has its advantages and disadvantages, but what are they? Where should mid-market sponsors begin and under what circumstances should they look beyond traditional bank financing and why? 

12:25 Willing and ABL – dispelling the myths

Asset-based lending is arguably an under utilised and mis-understood form of finance. What are its advantages in private equity-backed deals? What types of transaction is it most suited to and what developments are taking place within the ABL space? 

12:40 What new ECB lending guidelines could mean for you? 

Edward Eyerman of Fitch explains the impact of new US-style restrictions on leverage

13:00 Lunch

14:00 How to raise a debt fund 

A master class in fundraising for debt vehicles 

14:30 Debt fund dilemmas 

Private debt funds have exploded in the past three years. With such heavy competition and relatively muted deal flow, will debt fund managers be able to deploy their capital and make the returns they have promised investors? From moving up and down the market to co-operative relationships with banks and sponsorless deals, what strategies are they pursuing to ensure they are active? What will this mean if debt funds are unable to deliver for their investors? And how will debt funds behave if a downturn hits? 

15:00 Done Deals Live: Wagamama

Wagamama last year issued a public bond of just €150m, making what was once the preserve of the mega market a genuine mid-market financing option 

15:15 Coffee

15:35 Terms and conditions - what GPs and lenders look for in terms sheets today 

With so much money to invest, direct lending funds are dropping covenants, offering more headroom, including baskets for the incurrence of additional debt and in some cases foregoing core protection rights. Banks have responded by offering more term loan Bs. At the same time, it is increasingly common for GPs to push for the right to incur additional debt for buy-and-builds in the low growth, high multiple environment. How exactly are lender protections eroding? What is up for negotiation and what will different lenders not budge on?

16:00 Banks vs Funds

Two major players go head to head to debate the relative merits of the different lenders

16:25 Have your say

An interactive voting session reveals the true state of UK mid-market debt

Direct lenders now account for around half of all deals, although the UK is still some way behind the US. Will debt funds become an even more prominent feature of the UK financing market or have they peaked? Will a mismatch between deal flow and committed debt capital lead to a shakeout in the alternative financing space? What does the future hold for UK mid-market debt?

17:00 Networking drinks

Speaker Interview: Real Deals UK Mid-Market Debt Q&A

Andrew McCullagh, Hayfin Capital Management

1. When you compare leveraged and acquisition finance markets now to when Hayfin was launched, what would you say are the main differences?

Back in 2009, it was tough for many companies to access credit – the CLO market was closed, banks were looking to reduce their overall loan exposures and being very disciplined about any new lending, and there were only a small number of alternative credit managers with capital to invest, of which Hayfin was one. We’re now seven years further into the credit cycle and deals are being structured today which wouldn’t have happened back in 2009, and indeed many companies are accessing credit who probably couldn’t have done so seven years ago. Part of that reflects the greater risk levels lenders are taking, as you would expect as you go through a credit cycle. But it also reflects a much greater choice that borrowers now have when looking to access credit and the myriad of lending strategies out there, and that’s a clear positive.

2. There has been huge growth in the number of direct lending funds in Europe in the last few years. Did you foresee that when Hayfin was only one of a handful of such funds?

The market dynamics in European leveraged finance for a credit investor, particularly one with the ability to invest across the capital structure and in different credit strategies, were attractive at the time that Hayfin was founded. In that respect it’s natural for a succession of newer direct lending funds to have subsequently sought to emulate this approach. Nevertheless, the increase in the number of Europe-focused funds has been extraordinarily pronounced, from two or three at the time of Hayfin’s inception to the dozens we see today, and overwhelmingly concentrated in London. What remains to be seen is whether the market will retain as large a number of new entrants throughout the next phase of the credit cycle. This will place greater demands on funds’ ability to originate good-quality risk-adjusted returns as competition increases, as well as on their workout capabilities as defaults start showing up in their portfolios.

3. Is the rapid growth in the number of direct lending funds, and the amount of capital they have to deploy, sustainable? 

The sharp increase in the number of direct lenders in the European market has made origination of investment opportunities more challenging and necessarily put pressure on the returns these funds can generate for their investors. One way established players are looking to sidestep this competition is by developing the specialist sector expertise required to access more complex areas of the market which remain largely untapped by generalist private debt funds, as Hayfin has with its shipping and healthcare teams. In the longer term, the fact that alternative lenders in Europe still account for a far smaller proportion of activity in leveraged finance markets than in the US suggests that there is scope for further growth in deployment – especially if we see additional changes to the regulatory environment for banks.

4. In the long-term how do you see your interaction with the banks developing? Will you be competitors or collaborators?

It’s difficult to know with any certainty what banks will look like in 10 years’ time, as regulatory pressures and the rise of FinTech companies and other alternative lenders force them to reconsider which activities are their most profitable. If these changes were to prompt banks to withdraw from the kind of conservative, low-risk corporate lending which they currently almost monopolise, it’s credible to suggest that Hayfin and other direct lenders will fill this gap and continue to expand the amount of the market provided by the alternative lenders. Of course there will always be competition for the best quality assets between banks and funds. But collaboration more accurately describes the relationship, where funds such as Hayfin provide additional firepower for these lower-risk loans where bank capacity is constrained.

Stay up to date with the latest in European private equity. Register for the free daily news alert from Real Deals.