Secondary LBO paper trades.

Pricing monitored by ELLI, Standard & Poor’s European Leveraged Loan Index, has found that trading in secondary paper is trading in line with ratings, such that BB credits are consistently being bid above B credits. While this might seem an obvious outcome, Ruth Lang, who began ELLI in November 2004 with trading data stretching back to January 2003, said: “Ratings are not really tied to pricing in Europe.”

Lang notes that 97% of the paper covered by ELLI is rated; of this about 30% is public and 70% private ratings. Multi-currency LBOs make up around 82% of ELLI and Euro denominated LBOs equate to 68% of ELLI.