Davis Polk partner Sanders Witkow was quoted in Reorg discussing the leveraged finance market and an increase in broadly syndicated loans (BSLs). 

Discussing the Fed’s plans to cut interests rates in September, Sanders said, “The margins dealmakers are getting in the syndicated market, with SOFR remaining high, is attractive with the prevailing belief that benchmark interest rates will come down.”

“There is so much demand for high-yielding debt, whether it’s a term loan B or private credit,” said Sanders, noting that the leveraged finance market has more assets financeable compared with six to eight months ago.

Although there seems to be continued competition between the BSL and private credit markets, Sanders said, “When it is theoretically possible to do a deal in the BSL market, dealmakers are absolutely more open to that than in the recent past.”

“Leveraged Finance Market Participants Prep for Uptick in New-Money Transactions This Fall, Bolstered by Strengthening M&A, LBO Activity,” Reorg (August 28, 2024) (subscription required)

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