28th November 2023

ELFA - Keeping Members on the Cutting Edge of Market Trends

The European Leveraged Finance Association, a trade body representing investors in high yield bonds, leveraged loans, private debt and CLOs, was founded just under five years ago by a group of 10 high yield investors. Now home to 63 member firms and over 1,000 individual members, the organisation has established itself as a credible counterparty to regulators, trade bodies, borrowers, advisers and other market participants, working on behalf of its members to support a stronger, more resilient leveraged finance market in Europe.

We achieve this aim through the work of seven committees: four are focused on each of the asset classes that we represent, whilst the Diversity & Inclusion Committee, ESG Committee, and Engagement Committee coordinate efforts on behalf of all of these. The asset class focus ensures that our initiatives are tailored to the needs of each market, and committee co-chairs, who are all volunteer members, direct efforts proposed, developed and executed by committee members. 

ESG has been a key focus for members since ELFA’s inception, and under our ESG Disclosure Initiative we have published 15 sector-focused ESG Fact Sheets, designed to guide borrowers on data gathering and disclosure and to serve as an engagement tool for lenders. These are the result of a series of workshops involving borrowers and credit analysts operating in each respective sector, ensuring that the data points included in these resources is relevant and material.

We also publish best practice guidance for the market, including our Best Practice Guide for Sustainability-Linked Leveraged Loans, co-published with the Loan Market Association, and our Best Practice Guide to Term Sheet Completeness, designed to support more fulsome disclosure in broadly syndicated loan term sheets.

Our Insights Series reports provide a platform for members to express views on important issues, including disclosure, transparency, and market practices, reflecting our remit to facilitate engagement by our members with the broader market and general public. Recently, we published CLO Carbon and Climate Disclosures: Methods for Enhancing Transparency, which addresses carbon disclosure for CLOs and other funds. It comes shortly after the publication of a carbon reporting guide by the Initiative Climat International (iCI), which ELFA supported.

We also actively engage with market participants and regulators on key issues facing lenders, including transparency, disclosure, transfer restrictions, settlement delays and others. Often our engagement efforts are followed by Insights Series reports for the benefit of the wider market, or result in best practice guidance.

In November we will host our second Annual Conference, co-hosted by Bloomberg. During the event, we will hear from experienced professionals at the cutting edge of market trends, with panels designed to support truly impactful discussions. We use the event as an opportunity to share key updates on the work from the year prior, and to plan the year head, ensuring that we remain focused on the issues that really matter to our members and the wider market.

Our members are all buyside, and we will remain an independent association for lenders. Our Partner Programme provides opportunities for non-buyside market participants to get involved in our work, and is home to law firms, ratings agencies, and service providers. If you would be interested in hearing more about membership or partnership with ELFA, contact Sabrina Fox, CEO, sfox@elfainvestors.com.


Interview with ELFA CEO, Sabrina Fox 


Can you tell us about your trajectory up until now? What led you to becoming CEO? 

I help to found the organisation in 2019, and in the weeks leading up to announcing its formation offered to lead the group and help grow the organisation. After two years, the Board voted to make me Chief Executive Officer, and I could not have been more excited or proud to continue my service to this impactful organisation.

My background is in finance law, and after a decade I moved into contractual analysis, advising lenders on covenant provisions in high yield bonds and leveraged loans. It was through this work that I met the investors who became ELFA’s founding members, and where I developed an understanding of the issues facing lenders in the leveraged finance market.

Leading ELFA has been a great privilege – our members are passionate and dedicated to our mission, and that makes my job a real joy.  

How do you work to achieve ELFA's mission? 

My job is to grow and strengthen the platform we have created for members to achieve their goals. I am also responsible for establishing and maintaining our relationships with other trade bodies, regulators, and market participants. I also share the work we do with the wider market at conferences, to press, and through publications like this one. 

The Board ensures that our initiatives are relevant, impactful, and efficiently executed, and they oversee the work of our committee co-chairs. We use a bottom-up and top-down approach to selecting, executing and refining our initiatives, with Board and member input incorporated into the workstreams. This gives us a comprehensive view of market trends so we can be effective in carrying out our mission.

What are the initiatives you are working on now? 

There are so many! To name a few: our ESG Committee has been working to increase ESG disclosure since 2019, and has recently focused specifically on climate disclosure with publications and workshops on the topic. That committee cooperates closely with all of our other committees, as ESG and sustainable finance are topics of importance to all of the asset classes that we represent. 

The Private Debt Investor Committee is focused on aligning ESG disclosure efforts as between GPs and LPs, and plans to host a roundtable discussion later this year with the main investment advisors in the private debt space.

The Loan Investor Committee is focused on market efficiency and has kicked off engagement initiatives on transfer restrictions. The committee is also looking at primary settlement delays.

The CLO Investor Committee recently published a report on CLO climate disclosures and offered suggestions for enhancing transparency and efficiency in disclosures.

The Disclosure & Transparency Committee, which works primarily in the high yield bond market, is developing a transparency pledge to maintain good practice on disclosure by borrowers.

The Engagement Committee is hard at work replying to a range of regulatory proposals, including IOSCO’s recent Proposed Good Practices on Leveraged Loans and CLOs.

The Diversity & Inclusion Committee is exploring and promoting inclusion, which is a prerequisite to better decision making, making it essential for employers in the leveraged finance market.

How do you think it is possible to achieve a more transparent, efficient and resilient environment in the leveraged finance market? 

When lenders work together toward these common goals, it’s all possible! Our organisation is founded on principles of collaboration, cooperation and engagement, using robust processes to incorporate the views of a broad range of market participants. Our initiatives are conceived by the buyside, but their benefits extend throughout the market and wider global economy.

What are ELFA's goals for the future?

We plan to continue our work in support of our mission, to build our membership and extend our Partner Programme. This will allow us to remain relevant and impactful, across all four asset classes, and for the benefit of all.