Following a sharp slowdown due to Trump’s tariff announcement, corporate loan activity is picking up, driven by improved pricing and investor appetite, though credit quality concerns still loom.
Speculative-grade corporate loan issuance in the US and Europe plummeted in April but has since recovered somewhat, providing corporate borrowers with a window to refinance or reprice existing debt—although lenders may be wary—and potentially take on new debt to pursue acquisitions or other capital-intensive moves.
The US saw record loan issuance in January and February, at $69.9 billion and $57.7 billion, respectively, according to PitchBook LCD. Following the Trump Administration’s tariff announcements, volume fell to $35 billion and took an even steeper drop to $19.7 billion in April.
Speculative debt issuance in the U.K. and elsewhere in Europe typically pales compared to the US market, but in April it plummeted as well, according to PitchBook, to $300 million from $2.5 billion in the U.K., and to $6.5 billion from $16.1 billion among other European borrowers.
In May and through the first half of June, however, volume across these regions staged a recovery, as demand from lenders increased, providing corporate borrowers with the opportunity to issue debt at more attractive rates.
Marina Lukatsky, global head of research, credit, and US private equity at PitchBook, said that pricing on new-issue loans in the US dropped from SOFR plus 375 bps in April to SOFR plus 365 bps in May, and while the current level is approximately 10 bps wider than in the first quarter, it’s tighter than most of 2024.
“As a result, borrowers approaching the market will find attractive spreads, especially high-quality companies from sectors isolated from tariff turbulence,” Lukatsky said.
Further underscoring the shift in market dynamics toward borrowers, she said, repricing existing debt re-emerged after the recent slump.
“LCD tracked $13 billion of these deals so far in June, more than March through May combined,” Lutatsky said.
The current window to approach the market, however, may not be fully open for all borrowers. Sean Griffin, CEO and executive director at the LSTA, pointed out that most companies seeking to refinance or reprice debt in US dollars have done so already, and loan maturities don’t pick up significantly until 2028. Consequently, lenders will look twice at borrowers approaching the market today.
“If a company has a pending maturity and it hasn’t done anything about it until now, lenders may suspect there’s an issue with the credit, indicating pricing on the wider-end,” Griffin said.
Lutatsky said the loan markets in the U.K. and other European countries saw similar drops and rebounds to the US in terms of loan issuance. They have also seen a jump in loans trading above par—increasing more than 40% by the end of May—that indicates repricing activity is resuming. She noted repricing deals for Ion Marks, Valeo Foods, and Eir Telecom that launched June 16.
“In terms of M&A activity to support volume levels, there does seem to be slightly more optimism in Europe, and there is some loan issuance supporting deals to be syndicated in the next few months,” Lutatsky said, pointing to Advent’s bid for French insurance broker Kereis, and Ardian’s investment in Diot-Siaci, a reinsurance brokerage and consulting group. “Year-over-year loan volume supporting M&A activity, she said, has more than doubled in 2025—$13.3 billion through June 13, compared to $6.1 billion in 2024 over the same time period.”
