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Leveraged finance (LevFin) issuance shrank to one of the lowest quarterly levels since the global financial crisis amid persistently challenging macroeconomic conditions and a high cost of debt. In 3Q22, the total volume of syndicated institutional loans and high-yield (HY) bonds across the US and Europe plummeted 84.4% year-on-year (YoY) and 52.5% quarter-on-quarter (QoQ) to USD 52bn. Year-to-date (YTD) issuance is down 72% at USD 367bn compared with USD 1.3trn raised in the first nine months of 2021.

A bout of optimism buoyed the markets on both sides of the Atlantic in August, as investors assumed that inflation levels had peaked and less aggressive interest-rate hikes lay ahead, but the rally was cut short as higher-than-expected inflation figures emerged. The latest round of central bank rate hikes and prospects of hawkish monetary policies in the months ahead, along with other negative economic and geopolitical headlines, again heightened market volatility, dampening hopes of a meaningful recovery in primary issuance.

For full report, visit ION Analytics Community.