Valuations and deal activity
Equity indices experienced a major dip following the COVID-19 outbreak but appear to have stabilised and recovered the lost ground.
Sources: Evaluate Pharma, CapitalIQ, St. Louis Fed, ICE Data Indices
Debt market spreads especially sub-investment grade spiked in March but have been gradually reducing as lockdown is lifted and business activity resumes.
M&A transaction activity dropped during lockdown as many transactions had to be halted or deferred; observation is that M&A activity is picking up again.
Debt markets for leveraged loans and high yield new issuances froze in April but are now thawing with several issuances being marketed with juicy coupons and steep OIDs.
The annualised Q1 VC funding figure may imply a run-rate that matches 2019 funding levels but it is likely that Q2 figures will be lower. However, the figure may increase quickly as new opportunities relating to COVID-19 materialise.