This is our weekly newsletter on all things leveraged finance, from the latest trends to in-depth coverage, to people moves — sign up to get these updates in your inbox each week.

And it’s 2018 all over again. Trump’s decision on Sunday evening to impose trade tariffs on the US’s closest allies triggered a wave of volatility across global financial markets, reminding investors what living under a potential trade war means.

But a lot can happen overnight, and a day later it was business as usual again. Tariffs on Mexico and Canada got postponed by 30 days, giving markets enough time to recover from the losses and adjusting to the ‘Trump trades’.

The Itraxx Crossover Index fell by 3 points by the end of the week to 287 points, with the German DAX being the first major global index to gain more than 10% YTD this year — pretty remarkable given the country’s exposure to automakers and their vulnerability to potential trades barriers.

“Shortest trade war ever,” one trader said. “We went through this 8 years ago, with a lot of bluster up front. We’re expecting tariffs much smaller than the headline number. Trump’s announcement was on the high end of the expected range with no negotiation so gave us confidence it would be short-lived.”

Interested in how of all this can affect UK’s and Europe’s levfin market? 9fin clients can check our latest analysis here.

Loan syndication desks followed the same track, moving from a ‘wait-and-see’ mood at the start of the week to back where they started the year: repricings storming the market, with little new money supply.

Bankers speaking with 9fin all agreed on a thinner-than-expected M&A pipeline and little visibility for Q1, in open contrast with some expectations for a solid revamp of buyouts activity from the start of the year.

“We are only working on a couple of early stage processes,” a senior banker said. “Sponsors have substantial dry powder to deploy but it feels quiet at the moment.”

Repricings and refinancings are poised to fill most of the overall issuance in the near term, but 9fin reported on two new money deals in pre-marketing that will be syndicated soon.

One of these is a private credit company that, as other direct lending fellows have recently done, that is seeking to refinance its private tranche in the much-cheaper syndicated market.

It’s a trend that, according to industry sources, will continue through the year given the lower spreads the institutional market is offering.

Air conditioning manufacturer Climater just launched a €336m TLB to back its future buyout. Investment firm Cobepa started the sale process in November and appointed Edmond de Rothschild as sell side advisor.

Direct lenders circled the opportunity to finance the acquisition, but eventually it moved to the syndicated to take advantage of its strong technicals.

With a little help from the wave of repricings, average spreads on term loans in the market have dropped to E+341bps margin and coupons for ex-private credit companies to E+416bps on average, 9fin data shows.

The is down on 2024, when private credits managed to come to syndicated markets with an average of E+475bps, adding up to €9bn of volume, or 5% of total issuance.

With the risk of repricings squeezing margins ever tighter and little visibility on the M&A pipeline, more private credit refis also means less risk for CLO arbitrage to stop working.

For now, the equity arbitrage still works as CLO liabilities have tightened enough to support it. But as repricing margins squeeze tighter, monitoring that arbitrage is becoming more important — one CLO manager told 9fin they declined 75% of repricings reaching their desk.

As noted in our latest European LevFin wrap, Euro AAA CLO liabilities on some new issues hover just above 120bps on the tight end, according to 9fin data.

Leveraged loans

Another source of new money could come from recaps, as sale processes aren’t closing as quickly as sponsors might prefer and lenders are showing they are keen to buy opportunistic deals.

This week, German high-voltage products supplier Trench was one example. It priced its €380m TLB at E+375bps with an OID of 99.75 to par, tightened from 99.5-99.75 and with syndication only lasting four days despite the company making its syndicated market debut.

The new TLB will be used to repay €210m in term loans that financed the company’s carve-out, and will also provide a €170m shareholder distribution, including the full repayment of outstanding shareholder loans. This led to concerns amongst lenders about the sponsor, Triton, as the deal reduces its equity cushion.

As other B1/B+ euro names have closed at an average of E+320bps and 99.95 so far in 2025, according to 9fin data, investors were drawn in by the wider spread and shrugged off tariff’s concerns — the borrower is US-based and operates a Canadian manufacturing plant selling into the US.

Banks have also accelerated timings for Waterland-owned United Petfood, showcasing how strong demand for paper is — the deal refinanced its existing debt and transfer United Petfood into a single-asset continuation fund managed by Waterland and the founding family.

The Belgian pet food producer closed its €1.225bn TLB at a tight E+275bps, making some CLO uncomfortable with the pricing.

“We like the credit and we've been in it for a while, but the margin is tightening past where we're comfortable, so we're exiting the name,” a lender told 9fin.

“In this market, you see decent credits go from 375bps to 300bps,” a second buysider said. “I’d much rather look at slighter wider opportunities like Trench.”

But others argued it was still possible to proceed, in the context of other wider-spread deals in the market, with a third buysider saying: “You roughly need a 380bps weighted average spread in CLOs, so if you want to play this, you also need to go for 450bps names.”

A small €375m TLB tranche also came from INEOS Composite, as it funded the buyout by KPS Partners — the euro term loan came alongside a $765m TLB for an overall €1.050 euro equivalent TLB offering. The euros priced at E+365bps and par this week.

“On a relative value basis it has been tightened too much, but the business is okay,” said another lender.

Here’s a look at what’s in market:

Here’s what priced this week:

Weekly leverage loan movers

High yield bonds

In a very busy week for high yield issuance in Europe, analytics company Kantar originally issued the equivalent of $1.675bn of euro/dollar notes, plus a minimum $250m TLB. But the banks dropped the dollar portion of the bonds today ahead of commitments, instead doubling down on €1.3bn of euro SSNs and FRNs.

The deal came after Kantar announced the sale of its market research division Kantar Media to HIG Capital. 9fin reported that Morgan Stanley, ING and Santander have underwritten around €600m in debt to support HIG’s €1bn buyout, winning the competition against direct lending funds.

HIG was previously in talks with direct lenders to support its bid for Kantar Media, as 9fin reported, with Cinven and Triton among the private equity firms that explored a potential bid. French market research firm Ipsos initially considered a binding offer but later decided against it.

Here’s a look on what is on the market at the moment:

Here’s what priced:

High yield bond movers

Forward pipeline

Enjoyed this weekly wrap? Our customers receive this content ahead of the crowd — find out more about 9fin’s news and analysis.