Guggenheim direct lending hits $1.4bn in Q1

The firm capitalised on a strong and competitive syndicated loan market during the quarter. 

Guggenheim Investments’ direct lending business has invested over $1.4 billion across the first quarter this year, the firm said on Tuesday.

“The middle market is as competitive as it has ever been,” Joe McCurdy, head of originations at the direct lending team at Guggenheim Investments, told Private Debt Investor. “But on the syndicated and direct lending sides of the market, we continue to find ways to deploy capital.”

The New York-based mid-market lender’s transactions spanned first lien, second lien, unitranche, and other structured products across the US and Europe, with a mix of direct, club and anchor deals, according to a statement.

“This quarter in particular, the range of things that we did—first lien, second lien, and preferred equity deals with companies with everything from $14 million to over $100 million in EBITDA – shows that we are doing what say we do, which is everything,” McCurdy added.

The largest deal the firm closed last quarter was a $200 million anchor order on a $530 million senior stretch loan to support the refinancing of a physician software provider in February. Other standout deals from last quarter include a $176 million anchor order on a first lien loan and a second lien loan to support the leveraged buyout of an automotive insurance software company in March and a $125 million investment to another software company this January.

McCurdy said that such anchor orders are great opportunities for mid-market lenders like Guggenheim in the current strong syndicated loan market.

“In a strong market, the sponsor community has picked up on the fact that including a direct lender like us early in a process benefits them because it’s free insurance,” he said. “We come in early and anchor a process, buy some portion of the paper, and therefore build momentum in a transaction.”

He added that the syndicated loan market is “very strong” and may be increasingly competitive this year.

“If firms have the chance to do syndicated or direct lending, more often people pick the syndicated market,” he said. “We have been successful in the direct transactions with levels of complexity, like a carve out or tight timeline, there.”

Guggenheim’s total deal volume in 2016 surpassed $4.7 billion, as PDI reported. That’s compared to the firm’s deal volume of $3.8 billion in 2015.