Fitch Publishes The Annual Manual: U.S. Leveraged Finance Primer

(The following statement was released by the rating agency)

Link to Fitch Ratings' Report: The Annual Manual (U.S. Leveraged Finance Primer)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=882418

CHICAGO, June 06 (Fitch) Fitch Ratings has published The Annual Manual, a primer
covering the U.S. leveraged finance market.

Fitch's 'Annual Manual' seeks to quantify and summarize the major factors
driving risk and opportunities for market participants in the leveraged finance
sector. The report combines analysis across Fitch's U.S. Corporates, Financial
Institutions (alternative asset managers), Structured Credit (CLOs), and Fund
and Asset Managers.

Historically, the business, credit and commodity cycles have rarely been
synchronized. Despite this, they have often been logically sequenced and have
signaled a similar message to observers. These cycles are currently sending
mixed signals, however.

The business cycle has not gained the type of momentum that would be expected
this deep into the economic recovery. The commodity cycle has clearly signalled
it is at its trough over the past year. Credit cycle deterioration tends to
follow periods of unsustainable economic growth, and exuberant management and
market expectations. In the current environment, Fitch believes the credit cycle
is advanced relative to the business cycle.

Fitch does not expect new deal characteristics to return to the leverage or
transaction size levels of 2006/2007. It is likely a downturn could occur
without seeing those types of large, highly leveraged deals. It is also likely
that a recession could occur without the business environment ever returning to
full steam. Idiosyncratic risk will remain a focus in non-commodity sectors.

As the commodity risks shake out and capital begins flowing again in the
leveraged finance space, Fitch anticipates discretionary risks to build again
with private equity and management teams gaining confidence, and taking
advantage of historically low, albeit slowly rising, interest rates. Fitch will
continue to evaluate the overall use proceeds mix (refinancing, LBO, M&A) for
new issuance; any elevated new transaction levels; and the structure, leverage
and size of those transactions.

The full fifth edition of the 'Annual Manual' is available at
'www.fitchratings.com.' or by clicking on the link above. Fitch's Leveraged
Finance team will continue to publish this report in the first half of the year
and welcomes market feedback.

Contact:

Michael Paladino, CFA

Managing Director

+1-212-908-0113

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

Mike Simonton, CFA

Managing Director

+1-312-368-3138

Media Relations: Alyssa Castelli, New York, Tel: +1 (212) 908 0540, Email:
alyssa.castelli@fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

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