Wider market woes are keeping buysiders from celebrating an uptick in primary European leveraged loan margins. Investors are split on whether the post-summer ballooning in loan pricing can be put down to idiosyncratic deals or snags well beyond leveraged finance land, pointing to macro misery including rising inflation and supply chain issues. The CLO market, meanwhile, has softened alongside, with AAA spreads widening from year-lows in the 80s to over the 100 barrier as we rush to record-breaking levels of issuance.

“It’s obvious there’s been a softening in both primary and secondary, but there’s no single reason behind it,” said one buysider, “and it’s against the backdrop of worsening protections for lenders, so the market is still firmly on the side of the sponsors.”

Buysiders complain they are up against smaller deals, as well as having less and less time to consider before commitments, meaning more loans are finding themselves in the reject pile.