Market Intersection: A Quarterly Look at the U.S. Credit Markets

US syndicated lending activity got a boost to pre-Covid levels in the first quarter. At US$590bn, it was up 59% from the fourth quarter and up 7% year over year. Issuers sought refinancings to cut costs and lower rates from Covid-peaks while others, who held off last year or waited on the sidelines to pull the trigger on M&A, re-emerged. “A lot of the universe has been repriced over the last six months, especially as 101 soft calls roll off, those opportunities have been attacked,” said one leveraged underwriter. “We have seen pushback, where deals come in at the wide end when you look at initial and official price talk and on any given day, some deals don’t perform well in the aftermarket. These are tell-tale signs of market fatigue. But this is in the day to day. The trend overall is still supportive for issuers.” 

Strong demand has helped keep it that way with over US$13bn in retail fund inflows and US$37.8bn in new-issue CLOs.