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Americas Leveraged Finance Weekly: Primary Activity Accelerates Ahead of Holiday Week
New primary issuance accelerated this week, as issuers look to tap the market ahead of next week’s Thanksgiving holiday that is expected to quiet activity. Leveraged loan issuance in particular was strong with 26 deals either announced or priced covering $26.3 billion of principal. High-yield bond issuance was somewhat muted with just six deals for $3.6 billion of principal. High-yield outflows increased this week to $1.24 billion from $200 million, while inflows slowed for loans to $170 million from $570 million, according to a report by Bank of America.
As new money tries to get ahead of what market participants say will be an earlier shutdown this year, the pipeline until the holiday season still looks fairly strong, said one leveraged finance banker this week. The banker noted, however, that the loan market has recently proven to be more resilient than the high-yield bond market, which is showing more dispersion.
One high-yield investor added that prior to last week, the market expected it would be a busy December for high yield, but now the poor performance of AI-related names has “put a damper” on activity.
Of notable primary activity this week, Sealed Air is lining up a roughly $8 billion debt financing package for 2026 consisting of high-yield bonds and leveraged loans in both dollars and euros to support its $10.3 billion acquisition by CD&R, Octus reported this week.
Meanwhile, Insignia Financial downsized its $671.5 million term loan B to $500 million on Nov. 20 because of lackluster demand from U.S. investors, although it upsized its Australian-dollar tranche amid strong reception from Australian and APAC investors, Octus reported this week. The AUD 1.93 billion debt package supports a take-private by CC Capital and One Investment.
Despite U.S. investors having shown reluctance about the Australian financial services company, citing Insignia’s complex turnaround story, new ownership and high leverage, the Australian dollar tranche is oversubscribed and expected to close soon.
Other deals struggled in the primary market this week, such as Mauser Packaging’s $1 billion loan to amend and extend debt that stalled several days past its Nov. 14 commitment deadline and widened price talk.
In addition, a $500 million term loan funding I Squared’s acquisition of Liberty Tire Recycling priced a day past its Nov. 18 commitment deadline after investors expressed concerns about the credit.
A second high-yield investor described the market as “nervous” this week, noting that any blemishes in earnings or 8-Ks, or any remotely negative news for a company, will “result in swift death” in the current market.
In the same vein, the leveraged finance banker flagged the trickle-down effect of Home Depot’s recent earnings, which has raised concerns as market participants search for signs of consumer health.
In other cases, companies are relaunching refinancing packages before year-end.
Cable One is preparing to relaunch a high-yield bond offering imminently to refinance its convertible bonds maturing in 2026 after struggling to gain sufficient interest from buy-siders earlier this fall, Octus reported this week.
Sevita is also preparing to relaunch an updated $2.5 billion financing package of bonds and a loan after the loan was pulled from the market in October. The offering will support Sevita’s acquisition of BrightSpring Health Services and refinance existing debt.
For more information on potential deal activity, see Octus’ Deal Origination Pipeline.
In the tables and summaries below, generated with the assistance of AI, we recorded $30 billion of issuances closing or announced across 32 deals 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
The following charts show issuance by use of proceeds for both loans and bonds but excluding repricings. Debt earmarked for leveraged buyouts and M&A has increased as a share of total loan issuance in September compared with the prior two months.
Pricing by Rating
The following charts detail average spread and coupon for loans and bonds, respectively, by rating band. 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 led the way for new issue announcements across loans and bonds.
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 317 bps, slightly wider from last week, according to ICE BofA data.
Moody’s Ratings and S&P Global Ratings downgraded the following companies to CCC this week:
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.
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