Firms are borrowing more than expected in the US leveraged loan market as they take advantage of strong investor appetite for riskier debt.
Banks increased the size of at least six proposed corporate loans by a combined $2.6 billion ahead of investor commitment deadlines on Thursday, according to data compiled by Bloomberg.
Insurance broker Alliant Holdings LP, for example, nearly tripled the size of a loan to $1.35 billion just hours after its launch while also securing lower borrowing costs than initial guidance. Market maker Hudson River Trading LLC finalized terms on a $1 billion transaction, more than doubling the amount originally pitched, while AthenaHealth Group Inc. reached a deal to extend a larger-than-expected portion of debt tied to its 2022 acquisition.
The upsizing wave underscores how junk-rated firms are seizing on renewed investor appetite for yield to improve terms or extend maturities on existing borrowings. Banks have brought about $35 billion of deals to the US leveraged loan market this week — the most since January — with the majority aimed at refinancing or repricing outstanding obligations, Bloomberg-compiled data show.
The move — which reflects bullish sentiment on the economy following a surge in corporate earnings — marks a sharp contrast with fears about AI-driven disruption and the economic fallout from the war in Iran that brought leveraged finance markets to a near standstill just weeks ago.
The US leveraged loan market has posted fund inflows for six straight weeks, according to LSEG Lipper, fueling a rebound in secondary debt prices and opening a window for firms to secure better terms on their borrowings.
Companies including gas pipeline operator GIP Pilot Acquisition Partners LP and asset manager Janus Henderson Group Plc have also secured better terms on deals set to price this week.
This article was generated from an automated news agency feed without modifications to text.
About The Author
