Debt Explorer | Loan issuance across all major jurisdictions saw year-on-year double-digit declines during the first half of 2023, as high inflation and rising interest rates continued to weigh on loan activity

Borrowers and lenders are seeking new opportunities in the face of growing market volatility

Issuers are tapping institutional loan markets for add-on debt at a rapid pace as private equity firms turn to buy-and-build strategies to lower entry multiples and accelerate deployment  

Investors eager to maintain high levels of capital deployment have kept terms and pricing highly flexible for bond and loan issuers, but that does not mean easy access for borrowers—lenders are still pushing back against credits that fall short of the quality bar

Debt markets warm to issuers from a broader range of sectors, maintaining high levels of refinancing activity  

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

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

Record SPAC issuance is expected to boost M&A activity, supporting additional leveraged finance issuance, while financial sponsors take advantage of the opportunity to exit existing investments.

The decline in H1 2020 leveraged finance issuance has seen some lenders intensify their focus on pricing and borrower-friendly loan structures, but lender responses to the impact of COVID-19 have diverged across regions