Wall Street lenders are delaying leveraged-finance deals due to investors avoiding risky transactions amidst turbulent global markets following US President Donald Trump's extensive tariffs. In recent days, banks have halted at least two leveraged-loan sales. These deals involve financing for HIG Capital LLC's acquisition of Canadian firm Converge Technology Solutions Corp. and a dividend for ITG Communications LLC's owner, Oaktree Capital Management. Before these incidents, there had already been six US leveraged-loan transactions withdrawn from syndication this year. US leveraged-loan prices experienced a significant drop last week, reaching their lowest levels since November 2023. Banks had underwritten a substantial amount of buyout financings that they had hoped to distribute in the leveraged-loan and junk-bond markets. The closing of the US debt capital markets has raised concerns about banks being left with unsold debt in the event that acquisitions are finalized before financing can be syndicated. An example includes the financing for ABC Technologies Holdings Inc.'s purchase of TI Fluid Systems Plc, where a leveraged loan worth $900 million struggled to attract investor interest, and a $1.325 billion junk bond sale was yet to begin. There is also a combined $2.35 billion of bonds and loans in the market for the takeover of Patterson Cos., with expectations that both debt sales would be wrapped up this week.
/Article