Buyout Barons Push M&A Loans in $70B Surge
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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.