Weekly Market Summary

Extra Credit^*

•The broadly syndicated loan (BSL) market has accelerated its push into deals previously financed by private credit. Roughly $12 billion of direct-lending deals have been refinanced in the BSL market so far in Q3, the highest quarterly volume since Leveraged Commentary & Data (LCD), a leveraged finance and private credit market intelligence provider, began tracking the data in early 2022. That already exceeds the $7.2 billion refinanced during the entire first half of 2026 and is well above the $7.5 billion quarterly average since the beginning of 2024.

•Despite the recent acceleration in private credit-to-BSL refinancings, the syndicated market remains selective. Refinancing opportunities appear concentrated among higher-quality direct-lending borrowers that can secure terms attractive enough for both the company and its private equity sponsor. This suggests that the increase in refinancings reflects targeted competition for stronger credits rather than a broad reopening of the BSL market to private credit borrowers.

•At the same time, private credit managers may have other priorities for capital. Facing pressure from weaker returns and fund redemptions, some lenders are building cash reserves to support existing portfolio companies rather than competing aggressively to retain borrowers seeking lower spreads. Public business development companies (BDC) filings also show some managers turning to share repurchases, which may offer a more attractive use of capital than pursuing new investments at increasingly compressed spreads.

Source: Pitchbook

Broadly syndicated loans (BSL) are loans issued by below investment grade companies and purchased by institutional investors. They are senior secured and have a floating rate coupon that adjusts with short term interest rates.