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The State of the Middle Market

Posted by David Diggins on Sep 11, 2018 11:25:30 AM

Middle market growth continues to be strong. The RSM US Middle Market Business Index (MMBI) posted a score of 134.5 for the second quarter of 2018, just a 2.2-point decrease from the first quarter’s record-high of 136.7 which was buoyed by new tax legislation. An MMBI score greater than 100 signifies growth within the middle market.

Based on strong earnings and revenues, executives were expected to expand hiring and increase employee compensation. Market sentiment among middle market businesses barely swayed despite increased tension over international trade and the slight tightening of finance conditions around the in the second quarter of 2018, potentially signifying the middle market's continued insulation from broader market trends. [source]

Middle Market Loan Trends 

Over the last few years middle market loan spreads have been steadily decreasing while the respective benchmarks have increased, resulting in a tightened yield for an increased risk. This spread compression, a result of competitive bids and a tightening market, continued through the fourth quarter of 2017. Since then, we have seen a slow but steady increase in coupon spreads in 2018 which signals a rebound on the profitability of middle market loans. Download the PDF to learn more.
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The ADI Solution

AdvantageData (ADI) provides one of the largest searchable databases of leveraged loans, middle market loans and corporate bonds in the world. ADI’s workstation provides the tools for finance professionals to source and analyze market data for valuation of illiquid and middle market loans. Quickly screen for details around pricing, leverage and other lender data for Middle Market companies. Create precedent debt transaction comps, screen for distressed and maturing refi opportunities for further business development, and more.

Founded in 1997, AdvantageData is a leading provider of credit and credit derivative pricing, descriptive, financial and analytical information. Finance professionals rely on ADI’s powerful workstation and data feeds to access a comprehensive global fixed-income platform for end-of-day valuation, research, compliance functions, and more. 

 

* RSM US Middle Market Business Index (MMBI) is presented by RSM US LLP (“RSM”) in partnership with the U.S. Chamber of Commerce

 

 


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