Americas Leveraged Finance Weekly: Repricings Surge While New LBO Deals Test the Market

The primary market had a strong week, with a handful of new LBO deals coming to market, testing investor appetite for future financings this quarter.

Octus covered 35 loan issuers that announced or priced $36.8 billion of loans. In addition, six high-yield issues came to market covering $5.6 billion of bonds. The leveraged loan market is on track to approximate the rapid pace of January from a year ago, which was the strongest issuance month of 2025.

Several LBO deals circulating the market this week, such as Hillenbrand, Hologic and Finastra, are setting a precedent for issuance in the first quarter, according to sources. Buy-side demand for large-cap transactions so far this year has been strong, in some cases “desperate,” Octus reported this week.

One high-yield trader said that despite an expectation that there will be “repricings galore” in the coming months, the market is humming right now as new issuance continues to be well received by buy-siders.

Notably, Hillenbrand is marketing a $1.8 billion-equivalent leveraged loan backing Lone Star’s $3.8 billion take-private acquisition this week. The Bank of America-led offering launched with $1.8 billion in reverse interest from investors with commitments due Thursday, Jan. 22, Octus reported.

Elsewhere, machinery supplier Columbus McKinnon launched a $1.325 billion loan financing a proposed $2.7 billion acquisition of Kito Crosby from KKR. Commitments on the JPMorgan-led loan are due Wednesday, Jan. 21, with price talk coming at SOFR+350 bps and 97-98 OID.

Meanwhile, MacLean Power Systems launched a $2.01 billion loan to finance the take-private acquisition by Blackstone Energy Transition Partners and merger with its existing portfolio company Power Grid Components. Price talk on the Barclays-led offering is coming at SOFR+275 bps-300 bps and 99.5 OID, with commitments due Jan. 22.

A second investor opined that the repricing wave so far this year has been “aggressive” in terms of the quantity and pricing of lower-quality names. The investor added that they hope the large, highly anticipated transactions such as Electronic Arts’ $55 billion buyout and Oracle’s $38 billion deal come to market sooner rather than later, emphasizing that the market is in need of new money.

Among many repricings, Grant Thornton Advisors tapped the primary market last week to reprice its $798 million term loan B-2 to be fungible with its term loan B-1 alongside a $475 million fungible add-on, both offered at SOFR+275 bps, Octus reported.

Elsewhere, Relativity priced a $720 million term loan to refinance an existing private unitranche loan at SOFR+275 bps and 99.75 OID.

Other deals that finalized terms this week included Hologic’s $7.25 billion term loan B financing its take-private by Blackstone and TPG, which tightened pricing at SOFR+225 bps and 99.75 OID after the offering was upsized from $5 billion. Finastra TCM also tightened pricing on its $1.2 billion-equivalent loan backing Apax’s acquisition to SOFR+375 bps and 99.5 OID.

For more information on potential deal activity, see Octus’ Deal Origination Pipeline.

In the tables and summaries below we recorded $42 billion of loans and bonds that were announced in the latest week.

Issuance volume year to date for leveraged loans and high-yield bonds is below:

Issuance by Use of Proceeds, Ex-Repricings

Issuance by use of proceeds for both loans and bonds but excluding repricings is shown in the charts below. For year-over-year comparisons, Octus provides data for the last 13 months.

Pricing by Rating

Average spread and coupon for loans and bonds, respectively, by rating band are detailed in the charts below. Because of the limited activity of CCC rated issuance, only the months with issuance are shown.

Pricing by rating category is shown below:

Breakdown by Sector

Industrials and financials have so far led the way for new issue announcements across loans and bonds year to date.

In the secondary market, the debt prices of Napa Management have been declining as lenders sell the company’s loans in small amounts amid the falling revenue, Octus reported this week. The company’s $610 million term loan due 2029 is trading in the 60s, down from indications of 75/80 as of Jan. 6, sources said.

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

Average high-yield bond spreads sit at 271 bps, according to ICE BofA data.

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

• Libbey Inc.
• STG Logistics Inc.
• Torrid Holdings

Octus Covenants’ analyses of the documentation for new loan transactions can be found HERE.

Octus’ Private Company Analysis recent reports can be found HERE.

Octus’ Fundamentals Coverage Weekly Update highlights new-issuer coverage in Fundamentals for the syndicated credit universe, alongside transcripts for syndication calls.