Americas Leveraged Finance Weekly: January Closes With Strong Buy-Side Demand, Repricing Wave and Software Sell-Off 

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Leveraged Finance Tracker

Despite issuance being dominated by refinancings, several new-money deals circulated the primary market this week. Octus tracked 22 leveraged loans and 13 high-yield bonds totaling $30 billion of new issuance in the latest week. Some $139 billion of loans were issued in January, equaling the strongest month since January last year. Flows turned positive this week for high-yield to $1.23 billion from $570 million outflows last week, the biggest inflow in eight weeks, while inflows moderated for loans to $520 million from $710 million, according to a report by Bank of America.

Leveraged finance participants noted that the market is starved for paper, and as a result, most new issuance is being “snapped up,” as evidenced in the success of recent primary deals financing LBO activity such as Hologic.

“The markets are getting rolling in the right direction, and everyone is eager to transact,” said Carey Davidson, head of capital markets at Monroe Capital. “January is always a bit of an awkward month. There is a sense that M&A is coming, but it’s a little early to have a real grasp on how the year will look.”

One leveraged finance banker echoed a similar sentiment this week, saying that despite primary issuance being largely dominated by repricings and refinancings, for the most part, the market is “hanging in” and has been receptive to new-money deals. So far this year, investors have been hungry to put money to work on financings tied to M&A and LBO activity, Octus reported in a 2026 outlook story this week.

Of notable recent primary activity, TreeHouse Foods launched $550 million of secured notes to partially finance its $2.9 billion take-private by Investindustrial alongside a $1.25 billion loan. Commitments on the bond and loan are due next week, and investors say the deal has been well received so far.

In addition, animal health technology company Covertus is offering its existing debtholders the chance to participate in a $3 billion unitranche facility lined up with private credit lenders to refinance its debt and fund an acquisition, Octus reported this week. Commitments on the proposed transaction were due from current debtholders today, Jan. 30.

Among new issuance this week, Team Services launched $750 million of secured notes and a $625 million term loan led by Morgan Stanley to fund its acquisition by General Atlantic. The deal is expected to price today. However, one banker flagged that the deal is facing headline related headwinds, considering the personal care provider is tied to Medicaid programs and is headquartered in Minnesota, which continues to be affected by civil unrest.

Elsewhere, packaging provider Sealed Air is in early talks with potential investors about its roughly $8 billion debt financing package backing its $10.3 billion acquisition by CD&R, which is expected to come to market in April, Octus reported this week. Price talk on Sealed Air’s term loan is coming above SOFR+300 bps, while price whispers on the bond are in the 7% area, according to sources, who say the deal remains in an early stage.

Meanwhile, a $1.2 billion loan financing Conga’s merger with Pros’ business-to-business division has yet to price this week. Octus reported last week that deal changes, including a wider margin or drop in OID, were expected on the offering, which passed its original Jan. 21 commitment deadline.

BioMarin also launched $850 million of secured notes and a $2 billion term loan to fund a $4.8 billion acquisition of Amicus Therapeutics. The Morgan Stanley-led notes priced yesterday, Jan. 29, at 5.5%, and the Citi-led loan priced at S+175 bps and 99.75 OID.

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

In the tables and summaries below we recorded $39 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

In the secondary market, the software selloff that began last week has continued this week, with companies such as ION Analytics, CDK Global and McAfee trading down. Market participants flagged that the biggest decliners are the highly levered software companies that have risks related to AI disruption.

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 272 bps, slightly wider than last week, according to ICE BofA data. The LSTA Leveraged Loan Index was indicated at 98.78, down slightly from weeks prior.

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

• Kosmos Energy
• Multi-Color Corp. (LABL Inc.)
• Nine Energy Service
• Rinchem Co. LLC

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.