Welcome to Debt Download, Goodwin's monthly newsletter covering what you need to know in the leveraged finance market. Is the repricing market as hot as a Manhattan subway station in August? Read on to find out.
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In the News
- The broadly syndicated loan (BSL) markets rebounded significantly in July, with gross BSL volume of $219 billion, the highest of the year. The flex score was 13.3:1 — less borrower-friendly than in June—but, on the other hand, spreads tightened to a multi-year low of S+333 for the second quarter of the year, according to CreditSights. Nominal spreads for private credit loans likewise tightened to S+532 (down from S+538 in the first quarter of the year). Repricing amendments returned with a vengeance, with over $159 billion in term loans repriced to reduce borrowing costs by approximately 42 basis points through July 29. According to Bloomberg, over $222 billion in loans were launched in July, the highest for the year to date. The Wall Street Journal noted that the last week of July "was the highest-volume week for mergers and acquisitions for U.S. companies since 2021", which is evidenced by these figures.
- Private equity firms have long been pushing to expand their reach by including private equity investments in retirement plans, and it is looking like President Trump will sign an executive order any day now permitting just that. Recent initiatives by major financial institutions, such as BlackRock and Empower, have already started paving the way. Empower, the second-largest retirement plan provider in the United States, has partnered with Apollo, Goldman Sachs, and other heavy hitters to offer private market investments through collective investment trusts. BlackRock "plans to offer a 401(k) target-date fund with a 5%-to-20% allocation to private investments," which will include private credit investments, according to the Wall Street Journal. Goldman Sachs' chief executive, David Solomon, confirmed that the firm sees "this as a pretty significant opportunity." Jeff Aronson, the co-founder and managing principal of Centerbridge, said that "private credit is a safe investment for 401(k) participants," emphasizing that the most important factor is that investors know what they're buying. Not everyone, however, is jumping on the bandwagon; Josh Easterly, the chief investment officer of Sixth Street Partners, recently stated some concerns "over protections available for individual investors in private credit," and some lawmakers have likewise expressed concerns about putting retirement savings at risk in connection with private funds investments.
- Since the inception of Debt Download, we have written about the meteoric rise of private credit in the markets. Now, it has officially arrived. In fact, JPMorgan Chase & Co.'s chief executive Jamie Dimon recently said "you may have seen peak private credit," when asked on an earnings call if JPMorgan might buy a private-credit firm (while separately announcing a few months earlier that JPMorgan was dialing up its private credit commitment to $50 billion). Private credit is not only making its way into 401(k) plans, it is also gaining traction at trading desks, with banks such as Bank of America Corp., Barclays Plc, Goldman Sachs Group Inc. and Morgan Stanley offering trading for private credit deals, says Bloomberg. In addition, private credit has become a priority for sovereign wealth funds "seeking alternative sources of income and resilience", as Invesco noted in its annual Invesco Global Sovereign Asset Management Study 2025.
- According to Bloomberg, the amount of distressed corporate loans and bonds was $166.9 billion toward the end of July, the lowest since tariffs were announced earlier this year. Notwithstanding the apparent decrease in distressed loans, Moody's reported that, in the second quarter of 2025, 21 companies defaulted on more than $27 billion of debt, up from the 15 companies that defaulted on about $15 billion of debt in the prior quarter. "With US tariffs and trade uncertainty unsettling global commerce in April, credit conditions have deteriorated," the Moody's report highlighted, noting that distressed debt exchanges are the leading type of defaults. S&P Global Market Intelligence in a recent report similarly flagged a surge in distressed debt exchanges in private credit transactions as a result of flexible covenants and the ability of borrowers to pay interest in kind (PIK). Not surprisingly, liability management exercises (LMEs) and distressed debt exchanges have "outpaced payment defaults and bankruptcies in every month since January 2024," according to PitchBook.
- Although tariffs have been on everyone's mind since "Liberation Day", Octus recently noted that tariff-related EBITDA addbacks have failed to gain traction in credit markets, suggesting that the buy-side considers tariffs to be an operating risk rather than a justification for addbacks to EBITDA. Meanwhile, restructuring professionals expect more financial strain in the second half of 2025 as a result of impending tariffs, in particular in the automotive, alternative energy, retail, and casual dining industries. Indeed, at least 10 bankruptcies in the United States filed since "Liberation Day" cited tariffs as a key reason for filing for relief.
Goodwin Insights – One Big Beautiful Bill Act – Tax Highlights
The One Big Beautiful Bill Act was signed into law on July 4, and with it comes substantial tax law changes. Goodwin partners Janet Andolina, Steven Clemens, Ora Grinberg, Daniel S. Karelitz and Eric C. Willenbacher provide an overview of some of those changes impacting companies and investors in the technology industry and early-stage companies generally, including changes to the tax cost of debt financing, in this Goodwin client alert.
In Case You Missed It – Check out these other recent Goodwin publications: The Trump Administration AI Action Plan: Faster, Higher, Stronger;One Big Beautiful Bill Act – Tax Implications for Life Sciences Industry; FinCEN to Postpone Effective Date and Reopen Anti-Money Laundering Rule for Investment Advisers; In Management Equity Repurchases, Who Determines Fair Market Value?; Changes to Birthright Citizenship and the Impact on Fertility and Assisted Reproduction Clinics
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