Wall Street buyout barons are rushing to the leveraged loan market to finance takeovers and dividends as they dial up risk-taking amid a brightening economic outlook.

Loan launches that back mergers and leveraged buyouts spiked to $70 billion in the first quarter of 2021, the most since 2018 and a 60% jump from a year ago. Those that have a dividend component surged to $13.4 billion, the most since 2014, according to data compiled by Bloomberg.

The leveraged loan market has long been the favored financing source for private equity firms looking to juice returns on corporate takeovers and to reward themselves with payouts before selling their acquisitions. As buyout firms seek to take advantage of the positive macro backdrop and increased demand for floating-rate debt to raise funding, there’s little sign of a let-up ahead.

Already this month RSA Security started the selling $2 billion of term loans for its purchase by Clearlake Capital Group and Symphony Technology Group. The loan for Apollo Global Management Inc.’s buyout of retailer Michaels Cos. is due to wrap up this week. And CoreLogic Inc.’s $4 billion deal to fund its its takeover by Stone Point Capital and Insight Capital is currently in market.

Dividend-backing deals are also hitting the market from companies including obstetrics and gynecology services company OB Hospitalist Group Inc. and SubCom, a fiber optic network provider. They join Organon & Co., which is offering $3 billion of loans and about $4.5 billion of bonds to pay a spinoff related dividend to Merck & Co.

Firms looking to raise financing for takeovers are finding willing buyers for floating-rate loans as Treasury yields continue to climb and inflation expectations pick up. Leveraged loan funds saw inflows of $12.7 billion in the first quarter as the 10-year Treasury rate jumped 83 basis points.


Dealers are calling for as much as $25 billion of high-grade supply this week, with sales expected to pick up Tuesday and Wednesday. Forecasts for the month stand at $90 billion to $100 billion.

  • Marvell Technology is in the market with a three-part investment-grade offering to help fund its acquisition of Inphi Corp.
  • U.S. investment-grade borrowers raised $278.7 billion of syndicated loans in the first quarter of 2021, surpassing pre-Covid-19 levels as the economy continues to recover from the pandemic
  • The relentless rally in the U.S. high-yield market has pushed spreads to an almost 14-year low while risk premiums for CCCs, the riskiest junk bonds, dropped to 526 basis points — a level last seen nearly three years ago


Primary market participants expect the Easter holiday to limit issuance activity this week, according to a Bloomberg News survey conducted on March 26.

  • High-yield bonds with more than 6.95 billion euros ($8.2 billion) outstanding are trading above upcoming call prices, making it attractive for issuers to redeem the securities in the next three months


Warren Buffett’s Berkshire Hathaway Inc. kicked off a multi-tranche yen bond deal on Monday, several months after announcing investments in Japan’s biggest trading companies.

  • China’s central bank asked lenders to rein in credit supply on concern the surge in loans is fueling asset bubbles, the Financial Times reported
  • New rupee bond offerings from Indian firms have almost dried up ahead of the central bank’s monetary policy announcement on Wednesday. All economists in a Bloomberg survey expect the Reserve Bank of India to keep interest rates unchanged