2025 Conference Remarks on High Yield and Leveraged Finance by BNP Paribas Exane

At BNP Paribas’ 21st Annual High Yield & Leveraged Finance Conference in London, the prevailing sentiment was one of optimism as industry leaders gathered to discuss the trends and projections for 2025. Despite the geopolitical uncertainties that loom large, there is a strong demand for leveraged credit and M&A activity in the market, indicating a positive outlook for the year ahead.

Renaud-Franck Falce, Head of Global Capital Markets at BNP Paribas, emphasized the importance of exchanging insights and networking at the event. He highlighted key trends in the leveraged finance credit markets, such as TLB refinancings, new money supply through M&A or dividend recaps, and a focus on rates. The conference served as a platform for over 1,400 participants to engage in panel debates covering topics like CLO issuance, the syndicated market, and cross-border activity.

Looking ahead to 2025, industry experts identified several key takeaways regarding the credit outlook. While the market is influenced by various known and unknown factors, the consensus is that a rate shock poses the biggest risk. Despite tight credit spreads, demand for high yields in the asset class remains high. Private debt transactions are on the rise, and although the leveraged finance maturity wall has improved, there is still work to be done in addressing upcoming debt maturities.

Viktor Hjort, Global Head of Credit Strategy and Desk Analyst at BNP Paribas Global Markets, noted that while political headlines may fuel uncertainty, supply and demand dynamics, as well as fundamental trends, suggest a relatively stable market moving forward. Leveraged finance emerges as a strong and sought-after asset class, with the cost of capital tightening despite political challenges. The distinction between direct lending and syndicated markets has widened, offering cost-saving opportunities for issuers. In Europe, attractive spreads present opportunities for investors, especially in floating-rate products like TLB and floating rate notes.

Charlotte Conlan, Vice Chair of Global Leveraged Finance, Global Capital Markets at BNP Paribas, echoed the positive sentiments from the conference participants. She emphasized the robust start to 2025, with a clear demand for leveraged credit and a recurring focus on M&A activity. Despite lingering geopolitical and geoeconomic concerns, the overall market sentiment is one of confidence in the ability to deploy capital effectively.

In conclusion, BNP Paribas’ 21st Annual High Yield & Leveraged Finance Conference set an optimistic tone for 2025, underscored by the industry’s resilience in the face of uncertainties and the continued demand for leveraged credit and M&A opportunities.