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Mergers & Acquisitions

U.S. Public M&A – 2016 Year in Review

U.S. public M&A activity remained vibrant in 2016 following the record-breaking deal announcements of 2015. Investment bankers and corporate attorneys set a record for closing U.S. public target deals in 2016 with $697.1 billion in deals closed during the year. Goldman, Sachs & Co. and Skadden, Arps topped the Deal Point Data M&A league tables for completed deals in this key market, closing $346.3 billion and $243.5 billion respectively. New deal announcements totaled a healthy $845 billion in 2016. This represents a 24.4% decline in dollar volume compared to the record-setting volume of 2015. The new year, 2017 is poised to be another busy year for top-tier investment banks and law firms as over $640 billion in U.S. public deal volume was pending as of December 31, 2016.

2016's 5 Largest U.S. Public Deals With Definitive Agreements
Target Acquirer Equity Value ($bil)
Time Warner Inc. AT&T 83,618
Monsanto Company Bayer AG 55,916
Spectra Energy Corp Enbridge Inc. 28,275
LinkedIn Corporation Microsoft Corporation 26,175
Level 3 Communications, Inc. CenturyLink, Inc. 25,138

Market Leaders - U.S. Public Mergers

Wachtell, Lipton, Rosen & Katz was the top ranked legal adviser on U.S. public M&A deals announced in 2016. Sullivan & Cromwell ranked second in the high profile public M&A advisory market.

Rank Firm Equity Value ($bil)
1 Wachtell, Lipton, Rosen & Katz 239.2
2 Sullivan & Cromwell 206.4
3 Cravath, Swaine & Moore 139.8

M&A Adviser Fee Watch

2016 M&A advisory fees of $4.0 billion have been disclosed through January 3 down by 22.0% over full year 2015. Goldman, Sachs & Co. led the market with $721 million in fees already disclosed. Morgan Stanley took second place among financial advisors in disclosed fees. JPMorgan rounded out the top three in disclosed fees.

High-Yield Bond News

New Issue Volume

The pace of issuance of SEC registered high-yield new issues rose by 3.6% from 2015's level. This represents a 24.1% decline over the pace of new issuance in 2014.

High-Yield Bond Covenants

Once again, the level of covenant protection continued to decrease in 2016. We evaluated the covenants in SEC registered new issues and found that only 29% contained limitation on restricted payments provisions down from 36% in 2015 and 42% for deals priced in 2014. Limitations of indebtedness covenants were also present in only 38% of new issues compared to 39% in 2015 and 47% of 2014's deals.