“CLO liabilities haven’t really come in, so I’d question how far they can really push repricings,” said a CLO PM.

Synlab rushed to market to slash rates on its €1bn 2029 TLB, part of the overall €2.45bn debt package that helped Cinven take over the company in 2023 — the largest of the year.

Cinven announced it sold a 15% minority stake in Synlab to LabCorp on the same day it launched the repricing. Banks have already revised the guidance at E+375/400bps from E+400/425bp — the existing loan pays E+475bps.

Group of Butchers and Amer Sports, two names that tapped the primary market in early 2024, are amongst the other repricing deals that hit the market this week.

Overall, six repricings have landed in September, roughly half of total September issuance. Here’s what has repriced so far this month:

“More repricings underpin the strength of the market,” a second banker said. “Buyers are willing to get less given rosier market conditions. We take the positive side of it.”

CLO managers might disagree with the above, but very few doubt that the market remains a mixed bag. The European iTraxx Crossover index stands at 288bps as of Thursday (19 September), near the record low for the year, supported by a “jumbo” cut by the Federal Reserve this week.

The US central bank brought the word back in fashion as it slashed its interest rates by 50bps — the first cut in four years — signalling that the era of easing rates has begun.

“An extension of the easing cycle should be favourable for riskier assets,” Jim Cielinski, global head of fixed income at Janus Henderson Investors, said in a note. “Particularly for higher quality corporate credits, whose fortunes are more exposed to consumer strength.”

“Similarly, companies with higher debt loads should benefit from lower financing costs,” he added.

Looking at volumes, the leveraged loan market in Europe is on track to post one of its best years on record in terms of volume, as per 9fin data.

In September, European issuers have launched €5.9bn of euro loans, up from €4.2bn and €3.6bn in 2022 and 2023 respectively. Still, the figures lag behind the level we’ve seen in 2021 (€7.9bn), as well as in 2018 and 2019 (€7bn and €6bn), per 9fin data.

What’s still missing from the equation is new money deals, which have so far made only a sluggish return from the holidays.

Leveraged finance bankers we spoke to recently pushed much of their visible pipeline to October, which seems to be the month that will kick off a flow of M&A activity in Q4.

Healthcare, TMT and industrial are the sectors that are expected to bring more buyouts to market, according to 9fin sources. Read our pipeline report here.

“Our volumes are growing — we have had four new money deals to work on only this month,” a third senior banker said.

Leveraged loans

Lenders can take a look at German electric motor manufacturer Innomotics while waiting for a steady M&A deal flow. The Siemens’ carve-out brought a €1.8bn EUR/USD debt package to back its acquisition from the US-based PE firm KPS.

As originally reported, the financing is split between €1.2bn of euro equivalent TLBs and €600m of SSNs. Initial feedback from buysiders speaking with 9fin shows some hesitancy on the carve-out, given a heavily adjusted EBITDA and some exposure to cyclical markets — although strong market positioning and tailwinds from electrification support the credit story.

French Valeo Food priced its €300m non-fungible add-on at E+475bps and 99 OID, from an initial guidance of E+500/525 bps and 98.5 OID.

The loan will back Valeo’s most recent acquisition: IDC Holdings, a branded snack business first set up in Slovakia with net sales of nearly €200m in 2023, as reported. Some new money investors told 9fin they were unsure about getting involved, on a slim non-fungible tranche as part of a B3/B- name, but strong demand from existing lenders drove pricing tightening.

Dutch chemical company Nobian is also seeking to extend to 2029 its €974m 2026 TLB and €200m of 2026 RCF, amid the intention of sponsor Carlyle to sell the business. The company has posted a few rocky quarters — see 9fin’s Q2 review here — since its carve-out from Nouryon, reflecting overall volatility in the commodity chems sector, but numbers show sequential improvement, three buysiders told 9fin.

A sales process will likely start between the end of 2024 and the beginning of 2025, sources said, but first Nobian will have to address its €525m 2026 SSNs that have been left out from the latest A&E.

As 9fin wrote previously: “Nobian’s SSNs include 101 change of control clauses and are portable at 3.5x […] Prospective buyers are unlikely to port the bonds given time to maturity. Instead, they would likely opt to redeem the bonds at the current 100.91 call price or when the bonds step down to par in July 2025.”

Here’s a look at what priced this week:

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

Weekly leveraged loan movers

High yield

The European bond market is keeping the strong pace it’s shown since the start of the month.

Non-food discount retailer Acqua & Sapone priced €400m of SSNs at 650bps and €450m of FRNs at E+425bps this week to back TDR’s takeover from HIG — it remains as a minority stakeholder alongside the Barbarossa family.

The Italian retailer signed a bridge to bond financing before going syndicated, as in the case of Forno d’Asolo, a producer of frozen bakery and pastry goods, expected to come to market by the end of Q3, as reported.

Here’s a look at what else priced this week:

And here’s a look at what remains in market:

High yield weekly movers

Forward pipeline

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