DEBT MARKET UPDATE FIRST QUARTER 2019
Throughout 2018 the debt markets remained historically aggressive in terms of pricing, leverage and covenant flexibility. There has been a surge in non-bank direct lending in the middle market.
Public physician practices, surgery centers and hospitals are currently trading at a median multiple of 9.8x (TEV / LTM EBITDA), down from the most recent cycle peak of 11.0x reached in June 2015.
Industry valuations follow the S&P 500 index relatively closely. However, public market data is limited as most providers are private.
Midwest banks have traditionally traded at discounted valuations relative to the broader S&P Financials Sectors Index, but the confluence of the Wells Fargo scandal negatively impacting large banks and the Trump election signaling regulatory relief (more positively buoying smaller banks) have had the effect of eliminating that discount.