After a relatively quiet past month, a flurry of high yield bond deals were launched this week, from a small €90m of add-on SSNs by Infopro to €700m in SSFRNs by TeamSystem.

Market sources noted that bond issuers had paused while waiting for the results of the French election. But given the short window before the summer, borrowers had to be quick to take advantage of refinancing on favourable terms.

“It's cheaper in high yield at the moment,” said buysider. “So people seem to be issuing into high yield more. I think that’s opportunistic — if you're big enough, you go into the bond market at the moment, which means loans will be quiet.”

High-yield funds have recorded marginal inflows recently, according to Bank of America research, indicating some confidence in what’s to come as LPs put pressure on GPs to create some sort of return.

Private equity-backed companies in the high yield space have begun to make moves, from CVC recently completing a fund-to-fund transfer of Italian e-learning company Multiversity and Triton agreeing to sell packaging company Bormioli Pharma to a larger peer Gerresheimer. We’ve done a full round up of deal predictions in the high yield space — whether dividend recap, sale or fund-to-fund transfer — here.

Still, there’s skepticism that a wave of M&A is actually ahead. Even though LBO issuance for this year has already surpassed 2023, figures are lagging behind 2022.

In our feature exploring the future of LBOs in the leveraged finance market, 9fin sources told us that valuation mismatch, timeline of underwrites and the wait for interest rates to drop are all still standing in the way of deals.

“There’s some real fatigue from investors at the moment and M&A should be post-summer at the earliest,” said a second buysider.

High yield

As opposed to the mega-deals of last week (see Vodafone Spain and Recordati), issuers this week skewed slightly smaller with higher pricing, indicating the opportunistic tone of the market.

At the upper end, Italian business software company TeamSystem priced €700m in SS FRNs at E+350bps and 100, while French opticians company Alain Afflelou priced €560m in SSNs at 6% and 100, both at the tight end of price talk.

With confidence higher, issuers keep the lead in the perpetual covenant tug-of-war — a topic we covered in our H1 covenant trend report. But there’s also been an increase in bondholder pushback when it comes to covenants, particularly around adding J.Crew language. You can read the full analysis here.

Several smaller deals got away as well, including Infopro pricing €90m in add-on SSNs at 8% at 104.875 and Spanish automotive interior compartments maker Antolin pricing €250m in SSNs at 10.375% at 100.

Here’s a look at what priced this week:

There are no high yield bonds currently in market.

Weekly high yield movers

Leveraged loans

Loans were quieter this week, though there were rumbles of what’s ahead.

There was only one launch — French private care company Ramsay Générale de Santé is out seeking a €1.45bn dual-tranche A&E. Price talk is at E+400-425bps at 99.5 for the €1bn Ramsay is hoping to extend out to 2027, while the remaining €450m (looking to extend to 2026) is guided at E+325-350bps and 99.5.

But we’re hearing there is more to come. We reported that lenders have been wall-crossed on a funeral care provider, with sellside sources saying there are “two or three” refinancings currently in pre-sounding before the market takes a breather over August. Read the full details here.

Other pre-marketings haven’t gone as well. One UK retailer dropped a planned refi as lenders wanted to push the margin wider, we reported.

Meanwhile, deals in market are enjoying a healthy reception for those still looking to do deals.

Despite a recent downgrade, Spanish hazardous residue recycler Befesa is in the market with a €626m TLB A&E (from July 2026), with price talk tight at E+275bps and 99.75-100 — compared to the YTD average of E+345bps for euro TLBs rated BB by S&P. Our full deal report is here.

And while Swedish infrastructure safety company Ramudden came to market with slightly wider pricing for a B2/B, it has revised price talks down from E+450bps at 99 to E+425-450bps at 99 on its €995m A&E transaction. Commitments are due today. Read more here.

Here’s a look at what priced this week:

Here’s a look at what’s currently in market:

Weekly leveraged loan movers

Forward Pipeline

Get in touch at marketing@9fin.com to request 9fin's weekly leveraged loan movers, high yield bond movers and forward pipeline.