Credit Markets Update Q3 2023

Read more about the credit markets activity during Q3 2023

Mike Rudolph

Mike Rudolph

Managing Director, KPMG Corporate Finance LLC

+1 708-391-7342

Leverage loan volumes recovered in the third quarter as secondary prices and risk sentiment improved

  • Third quarter new issue leveraged loan volume reached $94.3 billion, a 20% increase from $78.1 billion in the third quarter of 2022, and the highest volume for the past five quarters
    • M&A volumes recovered in the third quarter reaching $38.0 billion, or a 66% increase from the second quarter, but still well below historical levels
  • Refinancing activity remained strong in the third quarter, capturing about 74% of the U.S. Institutional loan volume
    • Repricing and amend-and-extend activity, which doesn’t factor into overall issuance data, witnessed a significant increase as borrowers seek continuance with their existing lenders amid continued worries about market conditions
  • The syndicated loan market made a mild recovery related to higher quality LBO assets, while private credit continues to be the financing of choice for relatively riskier deals and sponsors seeking options for their bolt-on investments

New Issue Leveraged Loan Volume ($bn)

U.S. Institutional Refinancing Loan Volume ($bn)


Count of LBOs financed in broadly syndicated vs private credit markets

High yield volume ticked up in the third quarter to $41.0 billion versus $18.9 billion in 2022, as YTD volume reached $134.7 billion

  • Third quarter volume of $41.0 billion recorded a significant improvement versus 2022 stemming from record activity in September driven by M&A deadlines and looming refinancing needs
  • The average yield at issuance closed the third quarter at 9.32%. Despite elevated yields, levels continue to stay below the decade high of 10.44% reached at the end of 2022

High Yield Volume ($bn)

The Federal Reserve paused raising rates at its September meeting citing progress on inflation and a gradual tightening in the labor market

  • The Federal Reserve indicated one more rate increase may be needed before the year concludes, highlighting the commitment toward the 2% inflation target
  • Geopolitical events have now made the macro picture more difficult to forecast and along with that, monetary policy as well

Secured Overnight Financing Rate (SOFR)

We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.


Get the latest updates to KPMG Corporate Finance LLC industry insights

Related content