Paris, le 30 mai 2024
Publication of the Aether FS Unitranche France index for the 1st quarter 2024
The first quarter of 2024 sent mixed signals in the area of unitranche financing operations in France. Despite a further increase in closing leverage to 4.24x (compared to 4.14x in the previous quarter), closing margins saw a slight decline, to 6.46% (compared to 6.51% in Q4 2023). . The Aether FS Unitranche France index, reflecting the cost per round of leverage (excluding base rate), thus fell to 1.59%, compared to 1.65% previously. These elements thus confirm the stability of the unitranche market
The prospect of a reduction in ECB rates over the coming quarters explains the return of the upward trend in leverage levels. At 4.2x in Q1 2024, these nevertheless still remain relatively low compared to the levels of 5.4x reached in 2019-2020. Closing spreads remain relatively high in a context of equally high base rates. Note that despite its recent decline, the Aether FS Unitranche France index has maintained an upward trend for more than a year, having increased from 1.31% in Q4 2022 to 1.59% in Q1 2024 (+21%).
More generally, the first quarter of 2024 is a continuation of the end of 2023. Debt funds confirm their return to financing LBOs alongside banks, which continue to operate the “small caps” LBO segment. . The number of LBO transactions is increasing, although the M&A market is still slow to restart (down 8% over the quarter in mid-market value according to the Argos index).