U.S. Companies Set Record with $153 Billion in Leveraged Loans in July 2025

In July 2025, U.S. companies issued a record-breaking $153 billion in leveraged loans, surpassing the previous high of $152.9 billion set in December 2024. This surge reflects a significant shift in the corporate borrowing landscape, as firms capitalize on favorable debt market conditions to reduce borrowing costs and manage debt more effectively.

Leveraged loans, typically extended to companies with substantial existing debt or lower credit ratings, have benefited from strong investor demand and narrowing yield spreads. The spread on these loans dropped to 4.34 percentage points in July, below the five-year average of 5.08 percentage points, indicating heightened investor appetite for higher-risk assets.

Financial institutions have played a pivotal role in this trend. Banks like UBS and Citigroup managed to offload previously unsellable debt associated with Patient Square Capital’s takeover of Patterson Companies. The banks sold $500 million of secured notes at a 5.5% discount and offered about $1.4 billion of term loans with a 10% discount, reflecting the challenges in the market despite improved conditions.

Private equity firms are also leveraging the favorable market sentiment. Vista Equity Partners revived a $3.6 billion refinancing for fintech firm Finastra, capitalizing on the rebounding market. The proceeds from Finastra's pending asset sale to Apax Funds in 2026 are intended to pay down outstanding debt.

The surge in leveraged loan issuance indicates a broader recovery in risk appetite and market liquidity. Lauren Basmadjian, Carlyle's global head of liquid credit, noted, "There is demand for risk assets and there has been no supply. And what happens with that backdrop, the market reprices."

This development has broad implications for corporate debt management, investor risk appetite, and the role of financial institutions in the debt markets. As companies continue to leverage favorable market conditions, the corporate borrowing landscape is poised for further evolution.