In the opening days of 2025, as the market stomachs a global bond selloff centred on the UK, the leveraged finance market has sprung to life with a modest wave of repricings and refinancings.

“The pipeline looks slightly thinner right now — that's a reflection of lots of things happening in Q4 24 — people were pushing to get stuff done before Christmas," said a banker.

We have at least five repricings in the market this week, mostly rated B and BB. While the anticipated rebound in M&A and LBO activity remains a question, spread compression appears to persist.

"I don't think there's much room for compression from current levels on a spread basis but I think we could get to low 300 on a flat single B if the pipeline of new money remains low,” said a buysider.

However, the pipeline appears to be gaining momentum, with Deutsche Bank pre-marketing a €1bn term loan B for digital real estate tech firm AVIV Group, another spin-out from Axel Springer.

French catering and facilities manager Elior also hosted non-deal roadshows with investors towards the end of 2024, according to 9fin sources.

Banks, including Goldman Sachs are also preparing €1.1bn of leveraged financing to back CVC Capital Partners buyout of CompuGroup Medical, according to Bloomberg.

For a comprehensive look at the potential deals, read this.

Leveraged loans

Likely spurred by strong activity in the dollar market, nearly all the launches this week are cross-border dual-tranche deals, including Tricor-Vistra, Solina, Hunter Douglas, MKS Instruments, Worldpay, Clarios, and NielsenIQ.

Aside from seeking repricings for both its euro and dollar denominated TLB, food manufacturer Solina is issuing a $185m add-on to support its acquisition of two US-based companies.

The Astorg backed company is looking to reprice its euro TLB from E+375bps to E+350bps and dollar TLB from S+375bps to S+350-325bps, led by Bank of America.

Pro forma of the transaction, Solina’s net leverage is expected to be 5.5x, based on an adjusted EBITDA of €289m, and a revenue of €1.6bn, according to a presentation to potential lenders.

Automotive battery maker Clarios also raised some eyebrows by marketing a $4.5bn debt package to fund a distribution to sponsors Brookfield and CDPQ, after scraping its IPO plan in the US.

“The sponsors have been involved since 2019, so I am sure they want to take some chips off the table since the company has done well,” an investor said.

Hunter Douglas brought the first non-repricing deal of the year. Its €904m TLB sits alongside $3.313bn of dollars, pushing for pricing of E+350-375bps and 99.5 OID with a quick deadline on Monday (13 January). Global exposure and weighting towards the refurbishment market are credit strengths, sources said, but the weak construction market in Europe is still a risk.

"Pricing is tight and there are some potential tariff concerns, but there is little else to put the money into so it will likely get done,” one lender told 9fin, with another agreeing — “It feels tight but that’s where the market it.”

“These initial crop of deals are feeling out how tight buysiders will go, setting the scene for the next few weeks,” said a second lender. “It seems like some strong single-B names will comfortably get to E+350bps, which is a bit painful for CLOs.”

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

Weekly leveraged loan movers

High yield bonds

Long-term borrowing costs are climbing across markets, with UK gilts taking center stage. The 10-year gilt yield hit another post-2008 high of 4.86%, while the sell-off has pushed sterling to its lowest level since November 2023, falling to $1.22 on concerns that rising borrowing costs could force Labour into difficult fiscal measures.

While it signals a strong distrust towards the UK economy, so far, the impact on the high yield market has yet to be seen. However, a banker noted that higher gilt yields are likely to dampen sterling issuance further.

Bond issuance overall has been quite light this week. We have got Tereos issuing €300m SUNs due 2031 to repay debt (Read the Credit QuickTake), and Kiloutou has returned to the market to refinance its SSNs due 2026, here is the QuickTake for more.

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

Weekly high yield movers:

Forward pipeline