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(Reuters) – This January broke a record in gross U.S. institutional leveraged loan issuance, as companies took advantage of a decline in borrowing costs, according to a Thursday report by JPMorgan.
The first month of the year recorded $140.1 billion in gross institutional loan issuance, according to JPMorgan. The last-highest net institutional loan issuance took place in November 2021 at $75 billion.
Last month also saw the heaviest refinancing volume on record at $51.4 billion, and the second-heaviest repricing volume at $78.7 billion, the Thursday report noted.
The record-breaking month came as corporate borrowers capitalized on fourth-quarter declines in borrowing costs to refinance existing debt and issue new debt.
Leveraged loan yields fell 66 basis points (bps) in December, while spreads slid 22 bps, JPMorgan noted. Yields declined a further 13 bps to finish trading on Wednesday at 8.61%, while spreads inched up one bp to 496 bps.
Wednesday’s fall in yields follows the U.S. Federal Reserve’s January meeting, where the Fed held its key interest rate steady but reiterated it could begin cutting rates later this year.
The high-yield primary market also saw its most active month in January since November 2021, with January volume hitting $31 billion.
Bond yields rose four bps to 7.92% on Wednesday, while spreads climbed 17 bps to 390 bps.
Four high-yield bond deals priced on Wednesday. These include $1 billion in five-year non-call two notes on behalf of molding systems supplier Husky Injection and $725 million in senior secured five-year non-call two notes for chemical producer INEOS.
