OREANDA-NEWS. Fitch Ratings says in its latest European Leveraged Finance Highlight that 2015 has seen more cash proceeds of recapitalisations being applied towards M&A than in the previous three years.

High equity cushions and weak pricing power increasingly leads to the search for scale and synergies among recapitalised leveraged credit borrowers, notably financial sponsor-owned borrowers. While many European industries show limited organic growth, M&A recapitalisations allow sponsor to pursue additional scale and pricing power through business combinations. At the same time sponsors are using market conditions to refinance existing debt at more favourable terms.

Fitch's European Leveraged Finance Highlight series features trends in the high yield and leveraged finance markets with analysis and the factors to watch in the near term.

The comment is available on www.fitchratings.com.