Debt markets heat up as banks tighten credit terms

Bond offerings and leveraged finance have stepped to the forefront of finance activity, with increasing number of merger and acquisition (M&A) activity worldwide. European private equity firms are particularly active in leveraged finance, and borrowers have found a welcome reception from bond market. Bank lenders in the U.S., are tightening credit terms, forcing companies to scale back credit lines and tap bond markets. The loss of access to bank debt is forcing companies to reply on other debt markets to maintain financial flexibility. Some specialty chemical makers with strongly performance stocks have tapped the secondary offering market to pay down debt. Leveraged buyout (LBO) financing is the key driver of debt markets in Europe.