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Leveraged Loans

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Despite the allure of lower loan prices, CLO managers should print deals cautiously
Software loan sell-offs and the Iran war have caused US and European loans to price differently
Leveraged loans in stressed sectors like software carry refinancing risk
LBO financing includes $5.75bn term loan to be priced early next week
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  • FIG
    The biggest lenders to emerging Europe might have to pull back from the region at the instruction of their central bank. Austrian banks, which account for as much as 20% of CEE loans, will have to restrict their subsidiaries’ lending growth to what they can refinance locally.
  • French supermarket chain Carrefour’s €1.5bn five year revolving credit facility was healthily oversubscribed in syndication, said bankers, despite a challenging market. Some 20 of the Baa1/BBB+/BBB+ rated company’s relationship banks this week signed into the transaction, which has a margin of 75bp and refinances a deal of the same size completed in July 2005.
  • Synchronised signings for OMV and Petrom
  • Austria’s Voestalpine, the steelmaking firm, has wrapped up its debut syndicated loan, signing a €800m five year deal with 11 relationship banks. Crédit Agricole and UniCredit co-ordinated the facility, which was oversubscribed but not increased.
  • European corporates face a potential new credit crunch as their funding needs grow in the coming years while banks deleverage, according to delegates at Standard & Poor’s London forum on the future of corporate funding this week. Companies will need to diversify their sources of finance in response, most agreed.
  • Sanofi-Aventis, the pharmaceutical firm, has managed to cut the size of the bank group on its new €3bn facility but demand for the A1/AA-/AA- rated company’s paper has meant that some banks have also joined the syndicate.