Leveraged Finance Newsletter Q1 2026

William Blair

Research

11 Pages

William Blair reviews a leveraged finance market that began 2026 with momentum before volatility shifted conditions back toward lenders. Loan volume rebounded 57% from Q4, but AI risk, Iran related uncertainty, and wider spreads cooled borrower friendly terms.

Key Takeaways

Loan Volume Rebounded: U.S. institutional loan volume reached $111.3 billion in Q1, up 57% from Q4 but 23% below Q1 2025.
M&A Activity Improved: M&A related loan volume reached $51.2 billion, its highest level in four years.
Lenders Turned Cautious: 69% of survey respondents made no borrower friendly concessions, while B minus spreads widened nearly 70 basis points.
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