Following increased regulation on banks lending to the middle market, it has become necessary to source alternative means of financing, such as direct lending or using the bond market. The lines are blurring between public and private debt markets, and the buy side is becoming increasingly involved in direct lending. The challenge with this trend is the subsequent lack of data available to the investor base as, unlike bank lenders that would rely on credit analysts, other participants may have fewer resources. Advantage Data, however, is on a mission to change this, and has secured the award for Best Market Data Newcomer (Product) in the process.
Advantage Data, which provides credit pricing and financial data to analysts and associates across debt capital market desks, has recently launched the BDC Mid-Market Loan Advantage to improve transparency in the middle market.
“Advantage Data leverages the public filing requirements of the business development companies (BDCs) to deliver pricing, analytics and index benchmarking for all public and private BDCs and their underlying investments to banks, direct lenders and institutional asset managers,” says Mark O’Brien, senior vice president, sales and marketing at Advantage Data.
For the investor community, it is of great value to have data on existing comparable investments to help source new opportunities and understand where a loan should price. The BDC Mid-Market Loan Advantage offers users deep insight into the middle market. Advantage Data has standardized investment type, seniority, sector and sub-sector classifications across all BDC holdings, allowing users to seamlessly benchmark middle-market spread, and yield by investment type, sector and commitment size. “We shine a light on the hard-to-price assets,” says O’Brien, explaining that loans covered in the BDC Mid-Market Loan Advantage “won’t show up on the radar everywhere”.
It is the intense focus on data collection in the middle market that has enabled Advantage Data to respond to the change in the market and the trend for how capital is raised. There are now 3,000 deals in the BDC Mid-Market Loan Advantage—making the product unique in terms of coverage. “We’ve built tools around [data collection in the middle market], whereas for many others it’s an afterthought,” says O’Brien.
Judges said the initiative brings “much-needed transparency to an under-served market”, and there is more to come from Advantage Data to benefit the middle-market investor community. Next up is addressing the increasing interest in evaluations by building on the company’s existing loan-pricing data feed.
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