Major deals finally returned to the US leveraged finance and high yield market after a weekslong slowdown in the wake of US and Israel’s attack on Iran.

JPMorgan led the charge with multiple deals braving a still volatile market. Bankers launched a USD 5.75bn USD and Euro term loan package with a 98.5 OID to help finance the USD 55bn buyout of video gaming group Electronic Arts.

“I think people will have to play into it because it’s so big. People generally like the underlying business too but also lots of talk about extreme valuation,” said a sellsider, adding that there are a lot of eyes are on the name.

An institutional investor said he was surprised by the positive reception to EA since the gaming sector might face its own AI-related challenges, but he noted that having well-known, blue-chip sponsors backing a name likely helps.

“We have seen the appetite for large deals with supportive sponsors be quite strong and well-received by the market,” added to Sean Feeley, high yield portfolio manager at Barings.

On Friday, JPMorgan started marketing a nearly USD 5bn term loan package in USD and EUR to fund CD&R’s take private of Sealed Air, as reported. The USD 4.1bn term loan is talked at SOFR+ 350bps-375bp with a 98.5 OID.

Prospects for a third JPMorgan-led deal—financing for Qualtrics’ acquisition of Press Ganey Forsta—are less certain as Qualtrics’ existing term loan trades well below par. Banks providing committed financing for the merger have so far held off on launching wider syndication as they prioritize EA, Debtwire reported on Tuesday.

Looking ahead, photo printing service Shutterfly is expected to turn to the public market to help refinance its over USD 2bn capital structure amid a revival of the company’s fortunes, Debtwire reported. The issuer has contemplated a refi with public and private market elements but may be able to attract enough support in the public market alone.

EA, Sealed Air and Qualtrics are all expected to tap the bond market along with term loans, continuing a trend of issuers employing mixed structures instead of just loans, as reported.

“The current view is more favorable for bonds given the higher quality composition of the market, lower exposure to software, and yields that on an adjusted basis for quality and duration remain quite compelling historically,” Barings’ Feeley said.

Still, the CLO market that is a large buyer of term loans is in much better shape today than the last period of geopolitical conflict in 2022 when Russia invaded Ukraine, said a CLO manager.

At that time, the CLOs were still suffering from lingering effects of the COVID-19 pandemic and likely were focused on managing exposure to troubled credits. Today, CLOs are likely in a better position to absorb new deals, the manager said.

Morgan Stanley enjoyed success in the loan market this week, setting final pricing terms on USD 3.09bn first lien term loan for water group Primo Brands at SOFR+ 275bps and 99.5 OID to refinance the existing loan 2028. The bank also set pricing on a USD 725m SOFR+ 275bps and 99.5 OID first lien term loan to help construct the Pelican Pipeline in Louisiana.

Banks led by Bank of America stepped up Thursday to provide a USD 2.4bn bridge facility to allow TV broadcaster Nexstar Media to acquire rival Tegna as soon as federal regulators signed off on the combination. A coalition of state attorneys generals filed suit this week to try to stop the deal.

Nexstar was in the market to raise a USD 2.75bn term loan to help fund the USD 6.2bn acquisition. It has since launched the sale of USD 3.4bn senior secured note due 2033 and USD 1.7bn senior unsecured note due 2034 to repay the bridge facility, fund the purchase of Tegna notes and refinance Nexstar notes maturing in 2027.