Leveraged finance (LevFin) issuance across the US and European institutional loan and high-yield (HY) bond markets in 1H24 more than tripled from a year ago, ballooning to USD 1trn. The rebound in issuance has been driven mainly by refinancing activity, while the undersupply of new-money paper amid strong investor demand has given rise to a deluge of loan repricing exercises on both sides of the Atlantic.
LevFin markets regained their appeal in 2024, as interest-rate hikes plateaued and fears of recession subsided. A rosier macroeconomic outlook and the prospect of rate cuts propelled investors to funnel money back into HY funds, while collateralised loan obligation (CLO) issuance also surged this year.
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