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US leveraged finance markets wide open ahead of inauguration

Borrowers stayed active in the leveraged loan and high yield markets this week as they brace for a potential increase in volatility linked to the arrival of the new Trump administration on Monday.

The week saw yields on the 10-year US Treasury decline following weaker-than-expected US inflation data that was published on Wednesday. CPI showed a 0.2% gain, the first monthly slowdown in core inflation since June and a pace that was slower than what the market expected.

Heading into the inflation report, yields were elevated after the release last week of the Fed’s December meeting minutes, which showed rate setters may slow cuts in 2025 in part due to uncertainty on inflation and potential impact of Trump’s policies.

US borrowers launched at least USD 56bn in transactions, compared to USD 49bn the week prior, according to Dealogic data. The market priced at least USD 24bn worth of deals, compared to nearly USD 14bn in the first full week of 2025.

“I think the risk appetite is out there, it feels like folks are embracing more volatility,” a buysider said. “Increased volatility is what people are expecting,” he added.

The current perceived headwinds are expected to dissipate shortly after the Trump administration takes office and the market gets a better grasp of the effect of his policies on the US economy.

One of the largest deals this week saw Clarios Global, a US lead-acid automotive battery supplier, price a USD 3.5bn term loan at SOFR+ 275bps with a 99.875 OID to fund a dividend to sponsors Brookfield Asset Management and pension CDPQ. The JPMorgan led deal initially launched at USD 2.5bn, and tightened pricing from initial price talk at SOFR+ 300bps-325bps and 99.5 OID.

Clarios also issued a EUR 800m term loan at Euribor+ 325bps at par, and USD 700m 6.67% senior secured notes due 2030. The Citi-led notes traded at 101.2 on Friday, according to MarketAxess.

“That was a very large deal. It still seems like the loan market is very strong, which isn’t really surprising because base rates have come down a lot from the highs because of the economic data this week, which is great from a funding environment perspective,” the buysider said.

The week also saw Endeavor Group Holdings announcing on 16 January a USD 1.25bn first lien term loan due in 2028, and a USD 3bn first lien term loan that matures in 2032.

The deal will be the first new money deal of 2025 to fund a buyout, supporting Silver Lake Management’s take private of the talent agency and controlling investor in WWE and the Ultimate Fighting Championship. JP Morgan is leading the group of lenders for the transaction.