For the first time in years, inflation is on the radar for high yield bond and leveraged loan lenders and borrowers—but how might it impact markets?

Borrowers take advantage of hot loan and high yield bond markets to lock in M&A and leveraged buyout financing at attractive terms and pricing

Refinancing activity supports a double-digit year-on-year uptick in leveraged loan issuance in the United States and Europe, while mega-deals dominate in the Asia-Pacific region.  

Refinancing, repricing, M&A and buyout activity all surged in the early months of 2021, but then lenders shifted gears in pursuit of yield and borrowers realized they could tap the market for more than just liquidity. Where will this fork in the road lead for the rest of 2021?

What will drive issuance in a post-COVID-19 world?

Plentiful liquidity supports a year-on-year rise in high yield bond issuance in the US, Europe and the Asia-Pacific region  

A strong market for refinancing and low interest rates have enabled most borrowers in Europe and the US to avoid bankruptcy and restructuring procedures

Leveraged finance activity in the healthcare sector made strong gains through Q1 2021 as the pandemic response saw the industry attract steady investor inflows and M&A interest

Tightening liability spreads and the backlog from 2020 have seen European collateralized loan obligations resetting and refinancing at historic levels in 2021

Management fee credit facilities have become increasingly popular among private equity firms during the pandemic as a tool to manage cash flow volatility

High yield bond and syndicated loan lenders are eager to fund US buyout deals, but competition from private debt markets and high secondary buyout volumes have restricted supply

High yield bond and leveraged loan issuance by European industrials, chemicals and materials companies sustained steady activity levels in Q1 2021 as they took advantage of a borrower-friendly market to raise financing

Borrowers are taking advantage of buoyant leveraged loan markets in the US and Europe to reprice existing credits at lower interest rates, and lenders are happy to oblige

Highly competitive and liquid markets saw leveraged loan issuance in the US and Europe surge, while activity in Asia-Pacific dipped despite high-profile jumbo deals

Borrowers in the United States, Europe and Asia are tapping buoyant bond markets to extend maturities and refinance existing debt at cheaper rates

Rising to challenges, funding a recovery response and leading the way to sustainable lending

COVID-19 disruption has had little impact on borrowers' ability to refinance debt and extend loan maturities

Many leveraged finance dealmakers welcomed the certainty and stability President Biden's election brought to capital markets but attention will now turn to what the new administration means for the markets in the long-term

Jennifer Kloud and Mitchell Kinastowski from BMO Sponsor Finance speak with White & Case partner Jacob Schtevie about BMO’s approach to funding technology credits, the importance of financial sponsor relationships in the mid-market and the growing popularity of recurring revenue financings

After a challenging 2020, APAC private equity dealmakers are forging ahead with deals, and financing markets are well-positioned to support the revival

The European leveraged finance market remains resilient following a year of unprecedented hardship, as lenders dissect credits to determine the best possible deals, from business fundamentals to pricing and documentary terms