Octus on Credit: Tariff uncertainty pauses leveraged finance market

With President Trump’s tariff plans still in flux, the leveraged finance market has hit pause as investors brace for impact on high-yield bonds and leveraged loans.

New issuance has all but dried up in the Americas and EMEA regions, and the few deals in the market are drawing little interest. US primary credits caught in the tariff crossfire, like  ABC Technologies and Chuck E. Cheese parent CEC Entertainment. Others, including Patterson, Mohegan Gaming and Owens & Minor, are showing signs of weak investor demand.

After a relatively open first quarter for broadly syndicated loans, sentiment has shifted sharply. Trump’s 90-day tariff pause could offer a narrow window for high-quality issuers to come to market—but for riskier names, the door remains shut. Market watchers are keeping a close eye on homebuilders, a sector seen as particularly exposed.

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