Capital Markets Update: Q3 2026

Overview

The third quarter looked quieter on the surface but the market undercurrent was swift and healthier. Fewer companies came back to reprice existing loans so headline volume dipped; however, financings that did get done were the ones that matter more. New loans and refinancings held up and a buyout activity manifest in an active September.

Key Takeaways

• M&A activity is returning. After a quiet second quarter, a run of September buyouts pushed LBO financing to about $20B. Lending for new deals, not just refinancing old ones, held steady through the quarter.
• There is more money than deals. Demand from loan investors reached its highest level of the year and it outpaced new supply by a wide margin. For borrowers, that means competition for good deals and leverage at the negotiating table.
• Credit quality sets the price. Intuitive but higher-rated companies continue to borrow on very favorable terms. Lower-rated companies are paying noticeably more, especially those addressing ’27 and ’28 maturities.
• Banks and private lenders want the same deals. The broadly syndicated market won back some of the largest buyouts and refinanced a record $16.4B of private credit loans. Private lenders are responding with sharper pricing. Borrowers who run a disciplined process across both cohorts are the ones who benefit.
• What it means for you. For owners and sponsors considering a refinancing, recapitalization, or acquisition in the next 12 to 18 months, the window is open but selective. Read the full update and/or reach out to our team to talk through what it means for your cap structure – happy to be a resource!