What’s the state of the US leveraged loan market, and what’s the outlook for the rest of the yeaWhat is coming through clearly in our conversations with credit professionals is that we are in a risk-on world. Somewhat delayed from earlier in the year, thanks to tariffs, but the strength and direction is unmistakable. This sentiment was amplified in our discussions about the US leveraged loan market in Octus Webinar: H1 2025: “How Private Credit and Banks Traversed the Tariff Storm to a Brighter Second Half.”

And while confidence reigns across public and private markets, how managers operate in each channel in this environment is instructive. For example, primary deal terms in broadly syndicated loans are set by secondary prices, not the other way around. Syndicate desks look at where comparable loans are trading, then set new deal spreads accordingly. 

This is as much art as science. No two borrowers are exactly alike. Multiple factors such as launch dates, issuer size, sector and leverage are considered. Experienced underwriters know if the new deal is priced “cheap to the market” – meaning its all-in yield makes it an attractive buy relative to what else is out there – CLOs and retail funds will buy it.