Leveraged finance participants are entering 2026 with a more optimistic outlook on primary high-yield bond and leveraged loan issuance, after a series of market shifts left dealmaking in 2025 more subdued than many had anticipated. Leveraged finance participants say that these factors, coupled with current market conditions, are more favorable to dealmakers’ structuring acquisitions than they have been in a long time. “Conditions are more ripe and the regulatory environment is much more favorable to acquisitions than it has been in years,” said Kris Ring, a partner in Goodwin’s Private Equity group, echoing that a looser regulatory environment will spur a rebound in dealmaking. Still, one of the biggest concerns for both buy-side and sell-side participants is whether a deal will clear antitrust, risk and regulatory approvals, Ring said. While the approval process can be timely and expensive for sponsors, having more certainty around the process easing will foster activity in the acquisition market, he added. “We’re continuing to see changes that favor sponsors, whether that’s in more aggressive EBITDA add-backs or people trying to push the high-water mark on EBITDA, as well as the deterioration of mandatory prepayments and an increase in prepayment premium carve-outs,” said Ring. Such changes come as a result of escalating competition among lenders across the broadly syndicated loan and private credit markets, which is forcing some to make concessions. “There’s a lot of dry powder, and lenders are fighting for good deals,” added Ring.
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