There are a few new money deals in the pipeline – including a chunky private credit refi – but sellsiders say near term activity is likely to continue to come more from dividend recaps, A&Es, and upsized refis. This week primary was haunted by ghosts of deals past, as issuers snuck in to extend maturities.

On the other hand, looking at the ghost of deals yet to come, in 2025 Barclays is forecasting €65bn gross and €50bn net in leveraged loan refinancings, according to a recent research note. While a slowdown in volume from this year, the bank is anticipating an uptick in activity from M&A and LBOs: €35bn compared to an annualised €29.8bn in 2024.

"The market is still asking for that LBO activity — each year we hear about things getting better in the first quarter of next year which is pretty annoying," the first sellsider continued.

“Anything that comes is going to get done really well on the financing side,” said the second sellsider. “It’s all about valuation.”

However, as CLO issuance continues to be strong – the European market inched up last quarter to €241.4bn in size across 617 deals –  investors will be hunting for names that could provide value in an already tight secondary market.

“You’ll have to go back and do more work on the names that you put aside because you had so many choices for new issuance in the first place,” said a buysider. “If you have a broader mandate than a CLO, it’s easier, because you can rotate out of a par bit of paper to other asset classes.”

The rest is politics

While investors wait on primary, eyes are on politics on both sides of the Atlantic.

This week finally saw the unveiling of the UK Labour Party’s much anticipated budget. With £32bn per year in spending increases announced, several key areas of levfin could see an impact.

Beleaguered UK-focused building material suppliers such as SIG plc and Huws Gray (recently downgraded to triple-C) could see a boost from the £500m the chancellor earmarked to top-up the current Affordable Homes Programme, which aims to build up to 5,000 more social homes.

However, a 6.7% increase to the national living wage (NLW) for people aged 21 or older will push up wage bills across sectors like hospitality and retail. Companies such as Cineworld and Stonegate which depend on low-paid labour may find themselves increasingly challenged.

See more on how the new budget impacts areas such as energy, private education and gaming in our full analysis here.

With the UK budget out of the way, the next big event is the US election on November 5. With the race too close to call, most market sources say tangible policy change is still too unpredictable to take any big pre-emptive action.

“I don't think the election should be particularly disruptive to European leveraged finance and our ability to access the market, unless there’s a massive macro disruption — there’s a longer tail for the implications of either administration,” said the second sellsider.

However, a potential rise in tariffs if Trump wins the election is the top concern for those trying to prepare.

“At a time of geopolitical instability like right now, you don't tear ties with your closest partners. US and Europe need each other economically,” said a third sellsider. “Tariff concerns are being spoken about with clients considering going to market.”

High yield

With the view that rates are likely to continue their decline, inflows have continued into high yield funds for the sixth week in a row according to Bank of America research, even as spreads remain tight.

Activity in the market also ticked along, with new money continuing to play a role and trickier credits providing a bit of premium.

Techem priced €750m in SSNs at 5.375% at 100.5, coming after it came to market in October seeking a change of control waiver following the announcement of its buyout by TPG and GIC.

Meanwhile Takko priced €350m in SSNs at 10.25% at 100, coming after creditors took the keys on the German retailer last year.

“The capital structure has been right sized to a business that operates in this sector — ultimately we got comfortable,” said a second buysider.

Boparan also priced £390m in SSNs at 9.375% at 100, tightened from IPT at 9.50-9.75%, after a challenging few years of higher costs and heightened leverage. In September, it disposed of its European poultry business, bringing leverage to the lowest reported level since 2012.

There are no high yield names currently in market.

Here’s a look at what priced this week.

Weekly high yield movers

Leveraged loans

CVC is seeking to extend the maturities of Swedish construction materials wholesaler Ahlsell, with an upsized €2.108bn TLB. While the building materials industry has had a tough year, Ahlsell has been seen as a bright spot due to its position in the market, pricing power and market share.

“They are a seller not of general merchandise but more specific parts that require more technical knowledge,” said the first buysider.

Meanwhile, the private credit refinancing and recap trends continued to hold strong as online service provider Your.World made its syndicated markets debut.

Leverage was a sticking point, as its Dutch family office owner Strikwerda Investments is seeking an €800m dividend via a preferred equity injection at the HoldCo level. While the marketed leverage was lower than peers, the pref equity could be seen as putting pressure on the company to upstream cash. See full analysis here.

Still, the allure of new money led to increased demand. It priced its €1bn TLB at E+450 at 99, tightened from price talk at E+475-500 at 98.5.

Here’s a look at the leveraged loans currently in market.

Here’s a look at what priced this week.

Weekly leveraged loans movers

Forward pipeline

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