Trump's tariffs cause market turmoil, jeopardizing leveraged finance deals and increasing investor nervousness

From Yahoo Finance: 2025-04-05 15:00:00

Deals in leveraged finance have stalled, sparking fears that banks may be left with debt from acquisitions. US President Trump’s tariffs sent markets plummeting, delaying financing for Canadian companies. Banks like Citigroup and JPMorgan face challenges in closing deals amid market uncertainties. Junk debt issuance in the US has ground to a halt.

The turbulence in the credit market has affected refinancing efforts, with Chuck E. Cheese owner CEC Entertainment struggling to refinance junk debt. The European market, however, saw success in funding buyouts. Despite Trump’s tariffs, M&A activity was picking up, but market volatility has increased investor nervousness.

Trump’s tariffs have rattled global markets, leading to recession fears. US junk bonds experienced a significant slump, with credit risk gauges signaling investor nervousness. The high-yield debt market struggled to attract borrowers, with banks facing challenges in selling deals amid market turmoil.
Banks like Citigroup and JPMorgan may need to self-fund a debt package for Canadian acquisitions due to looming deadlines.

In the face of market uncertainties, iconic brands like Hooters of America and Forever 21 are facing financial challenges. Johnson & Johnson’s bankruptcy attempt was dismissed, while other companies like Apollo Global Management and WW International are exploring debt restructuring options. Tropicana Brands Group is seeking debt restructuring to inject fresh capital.

Bank of America, Prudential Financial, Apollo Global Management, and UBS have made strategic hires in their credit and investment divisions. Brian Whaley joined Dechert to advise on private credit finance and structured products. The market remains volatile, with uncertainties impacting various sectors of the economy.



Read more at Yahoo Finance: Tariffs Stoke Fears That Hung Debt Will Return