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Leveraged Finance Weekly: Primary Market Is Quiet Amid Holiday and FOMC Meeting

Leveraged Finance
Primary Market
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The primary market was slower this week between the June 18 Federal Reserve meeting and yesterday’s Juneteenth holiday. During its meeting, the Fed announced it will hold interest rates steady, continuing its “wait and see” approach. While a similar amount of loan issues priced this week as compared with last, few new deals were announced. In total, as of press time, $14.5 billion of loans priced this week and $4.2 billion of bonds priced, with an additional $3 billion of bonds expected to be priced by X.AI later this afternoon.

Among notable primary activity this week, Sizzling Platter launched its $500 million senior secured notes maturing in 2032 to finance its acquisition by Bain Capital, Octus, formerly Reorg, reported this week. Debt financing for the deal also includes a $425 million first lien term loan facility, $80 million delayed-draw term loan and $480 million of equity contributions.

Meanwhile, Skechers launched its $1.245 billion and €750 million loans to fund its acquisition by 3G Capital and partially refinance debt. Skechers’ exposure to tariffs has been a major concern for investors, though the deal has seen significant demand from banks because of the sneaker brand’s strong position in budget footwear and the lack of primary deals in recent months, Octus reported during the deal’s premarketing phase.

Despite activity being relatively quiet this week, market participants remain fairly optimistic about the primary pipeline.

“I think we’ll continue to see more deals and market acceleration this summer,” said Tom Amster, global head of financial sponsors at Macquarie Capital, on his near-term expectations for the market. “I haven’t heard people say that they are waiting until after Labor Day – sponsors want to and need to deploy capital.”

Leveraged loans that priced this week are shown in the chart below:
 

Additionally, loans that have yet to price but are currently in the market are below:
 

A chart of high-yield bond issuance this week can be found below:
 

Despite the shorter week, there were a fair amount of drive-bys, including Level 3 Financing, which refinanced its higher-cost notes, eventually doubling the size of its issuance given solid market demand. AMC Networks and Anywhere Real Estate were non-drive-by transactions which priced, along with the Sizzling Platter offering, which is expected to price next week. Pricing for both AMC Networks and Anywhere Real Estate was roughly in line with initial talk, without the typical tightening, and secondary performance has generally been slightly negative.

“The concern right now is not about raising capital; it’s about the deployment of capital,” Amster said. “That’s a new shift we’re seeing. Capital accumulation isn’t the issue – capital deployment is.”

This week, the LSTA Leveraged Loan Index reached an indication of 98.39, continuing a slight uptick from last week.

Top daily loan decliners and risers can be found in Octus’ Credit Cloud. A search for the largest bond decliners is HERE.

Moody’s Ratings and S&P Global Ratings downgraded the following companies to CCC this week:
 

In addition, S&P downgraded GPD Cos. to SD after the completion of the exchange of its 2026 debt.

Octus Covenants’ legal analysts completed analyses of the documentation for the following new loan transactions: Actus Nutrition, Aggreko, Altera, Aspire Bakeries, Beacon Mobility, Creative Artists Agency, Inmar, ION Trading/ION Markets, Jostens, Proofpoint, Sazerac, Sizzling Platter and Skechers.

Octus’ Private Company Analysis team this past week released reports on companies including Sequens, Huws Gray, Verifone and Staples.