Capstone Headwaters Reports: Middle Market Lending Activity Screeches to Halt in Second Quarter

August 19, 2020

Boston, MA – Capstone Headwaters released its Q2 Middle Market Leverage Finance report today, reporting that middle market (MM) lending activity came to a screeching halt in Q2 and only recently has new issuer volume returned.  However, the focus initially has been on opportunistic, well-structured financings involving fundamentally sound businesses in recession-resistant sectors.  According to the report, companies in cyclical sectors hard-hit by the recent market changes will still be able to find new capital, but on decidedly investor-friendly terms that will reflect today’s higher loan pricing, conservative valuations, and creative risk-return structures.

With limited new deal activity, the opaque MM Leverage Lending market has provided limited relevant data points since the onset of the COVID-19 pandemic.  However, given the similarities in credit quality, we can derive valuable insight between the broadly syndicated Leverage Loan market and the MM.  As a result, key market indicators point to a sharp decline in credit quality as borrowers navigate through the economic fallout of the COVID-19 pandemic and the various measures taken to limit its spread.

To access the full report, click here


Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. The firm has a rich 17+ year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors, and creditors. CSHW offers a fully integrated suite of corporate finance services, including merger & acquisition, debt & equity private placement, ESOP advisory, corporate restructuring, valuation & fairness opinion, and financial advisory services. Headquartered in Boston and Denver, Capstone Headwaters has over 170 professionals across 17 offices in the U.S. and an international presence including 450 professionals in 40 countries. With 16 dedicated industry groups, the firm delivers sector-specific expertise through large, cross-functional teams on a global basis. CSHW has been recognized as one of the top investment banks to work for, the top 3 most referred firms, and has been named “Middle Market Firm of the Year” for the past nine consecutive years. For more information, visit

For More Information Contact the Key Report Contributors:

Kent Brown
Managing Director

Brian Schofield
Managing Director