Summarize and humanize this content to 2000 words in 6 paragraphs in English (Bloomberg) — Deals in leveraged finance have stalled, and markets have been upended, raising the possibility that banks might once again get stuck with debt they’ve committed for acquisitions. Most Read from Bloomberg US President Donald Trump’s announcement of the steepest American tariffs in a century this past week stoked recession fears and sent stocks plunging. Financing for a Canadian auto-parts maker and a deal supporting H.I.G. Capital’s bid for a Canadian software provider were both delayed, creating risks for the lender groups, as the fallout rippled through leveraged finance markets. “For the time being, we need things to calm down before new risk is put in front of investors,” said Kelly Burton, a managing director who covers US high-yield investments at Barings. “It’s hard to justify why you would try to price out ‘early looks’ right now with the market on unsteady ground.” Wall Street lenders typically sell credit they’ve committed for an acquisition before it closes, but face the prospect of being left with so-called “hung” debt if they can’t move underwritten loans off their balance sheets by that time. Banks including Citigroup Inc. and JPMorgan Chase & Co. face an April deadline to close ABC Technologies Holdings Inc.’s purchase of TI Fluid Systems Plc, while a $900 million leveraged loan sale failed to attract enough investor demand by the Thursday deadline. A $1.325 billion junk-bond sale hasn’t launched. Meanwhile, a Bank of Montreal-led deal to fund H.I.G.’s purchase of Converge Technology Solutions was also struggling to drum up enough investor support for a separate loan sale. The deadline passed on Tuesday, though banks have until the end of June before the acquisition is slated to close. The turbulence was visible in other parts of the credit market too. An attempt to refinance $660 million of junk debt for Chuck E. Cheese owner CEC Entertainment fell short as investors shied away from consumer-facing companies, while efforts to refinance more than $5 billion of private credit loans from Finastra Group Holdings Ltd. fell apart. New issuance of junk debt, too, has ground to a halt in the US. The past six trading sessions saw just one new high-yield bond and no leveraged loan launches. “Why commit a bunch of new capital in front of risk?” said Jeremy Burton, a managing director at PineBridge Investments. The last time banks were left with hung debt came when the US Federal Reserve began raising interest rates three years ago to fight inflation. Investors became less willing to buy the debt of junk companies as a result because they could earn more from safer investments. European borrowers had largely weathered the resurgent volatility in leveraged finance markets. On Monday, banks managed to sell €7.45 billion of debt to help fund Clayton Dubilier & Rice’s purchase of a stake in Sanofi SA’s consumer health division, in one of the most hotly anticipated deals of the year. While the issuer made some concessions to investors on documentation, the deal priced in line with expectations. The deal was part of the tens of billions of dollars of leveraged buyout packages that Wall Street lenders were working on, a sign that M&A activity had started to pick up, though that was before the worse-than-expected trade taxes were announced by US President Donald Trump. Week In Review US President Donald Trump anounced hefty tariffs on dozens of nations on Wednesday, sending markets into turmoil. The prospect of an imminent global trade war and growing chance of recession in the US and elsewhere forced traders to shake off a complacency that had gripped the US corporate bond market. US junk bonds led the biggest slump in global high-yield debt since 2020. Gauges for credit risk signaled just how nervous investors are getting. Indexes that track credit-default swaps surged by the most since March 2023 in both the US and Europe. Bonds from a series of companies that rely heavily on international trade fell after Trump’s announcement. Through most of the last week, in the runup to Trump’s announcement and after the resulting market tumult, most investment-grade and junk-debt borrowers on the sidelines. In the high-yield debt market, banks struggled to sell deals that were already in the process of being sold. Companies sold about $6 billion of US high-grade corporate bonds for the week, falling far short of the roughly $25 billion that Wall Street dealers had forecast A group of banks including Citigroup Inc. and JPMorgan Chase & Co. may be forced to self-fund a debt package to finance Canadian auto parts maker ABC Technologies Holdings Inc.’s purchase of TI Fluid Systems Plc as the lenders near an April 15 deadline to close the acquisition. An attempt to get better terms for Finastra Group Holdings Ltd.’s more than $5 billion debt load — made up of one of the largest loans in private credit history — fell apart. Elsewhere in credit markets, Hooters of America became the latest iconic restaurant brand to falter in the face of stubborn inflation and Americans’ fading interest in eating out. Forever 21 Inc.’s bankrupt US retail operator is proposing that lenders get little — if anything — owned to them under a reorganization plan. Johnson & Johnson failed for a third time to deal with thousands of talc-related lawsuits by putting a unit in bankruptcy, after a US federal judge dismissed the bankruptcy of one of its units. The company can now ask an appeals court to review the case. Apollo Global Management Inc. and Citigroup Inc. are offering a razor-thin rate for a private financing worth around $3.5 billion backing Boeing Co.’s carveout of navigation unit Jeppesen. WW International Inc. is in discussions with lenders to swap a portion of its debt for equity in a deal that could also potentially hand control of the struggling diet business to creditors. Tropicana Brands Group is closing in on a debt restructuring that would give the juice maker $400 million of fresh cash, according to people with knowledge of the situation. On the Move Bank of America Corp. has named Greg Petrie as head of global private credit for its mortgages and securitized product group. Prudential Financial Inc.’s PGIM Fixed Income is hiring Blackstone Inc. alum Oliver Nisenson to lead the growth of its global private asset-based finance platform. Apollo Global Management Inc. hired Matt Faranda from StoneCastle Securities as it builds out its private credit trading arm. UBS has appointed its Americas chief investment officer, Solita Marcelli, to succeed Bruno Marxer as head of global investment management, Reuters reports, citing an internal memo it has seen. Brian Whaley joined Dechert as a partner in its global finance group in New York. Whaley advises on private credit finance, securitization, and structured and derivative products. –With assistance from Bruce Douglas and Rheaa Rao. Most Read from Bloomberg Businessweek ©2025 Bloomberg L.P.
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