J.P. Morgan held the 10th "European Leveraged Finance Conference" in London in September, which has been held for ten consecutive years, gathering institutional investors and issuer representatives from the global high-yield bond and leveraged loan markets.

According to previous disclosures by J.P. Morgan, the 9th conference held last September attracted over 1,800 attendees and representatives from 90 issuing companies, making it one of the largest institutional gatherings in the European leveraged finance industry.

As disclosed at the 9th conference, by the end of August last year, the annual issuance of European leveraged loans reached $177 billion, with an expected total of $225 billion for the year; the annual supply forecast for high-yield bonds was raised from €87 billion to €125 billion, with the high-yield bond spread narrowing by about 30 basis points to approximately 300 basis points, and the overall yield slightly above 5% for the year.

At the same conference, it was reported that the European high-yield bond default rate was about 3.5% at the time, expected to rise to 5.5% by year-end, but anticipated to fall back to 2.25% by 2026; the global private credit "dry powder" stood at about $450 billion, with approximately 145 CLO (collateralized loan obligation) warehouses under construction in Europe at that time, and 28 new CLO warehouses registered in July, the highest monthly total since 2021; European high-yield funds had seen about €8 billion in net inflows since late April of that year.

Conference attendees assessed that new leveraged buyout (LBO) underwriting transactions had reached about half a dozen during that summer, the highest activity level since 2021, but it was generally believed that a significant increase in M&A activity was "more likely in 2026 than in 2025"; the conference also identified leisure/theme parks, chemicals, oil and gas, and certain European healthcare issuers as relatively concentrated risk sectors, while infrastructure, satellites, defense, and equipment leasing were viewed as relatively opportunity-rich areas.

From an industry mechanism perspective, the European Leveraged Finance Conference, as J.P. Morgan's annual flagship event, serves the dual function of "creating momentum for high-yield bond and leveraged loan primary market issuance"—issuing companies use this platform to roadshow to institutional investors, while private credit and CLO managers showcase their funding strength and product supply capabilities; last year's data showed that funds continued to flow from traditional bank loan channels to private credit and CLO structured products, while low-rated (CCC-rated) issuers significantly underperformed high-rated (BB-rated) issuers, reflecting that even in a generally easing environment with narrowing spreads, institutional funds are consciously concentrating on quality assets and remaining cautious towards low-quality issuers.

Source: Public Information (Note: Market data from the third to sixth paragraphs are sourced from J.P. Morgan's disclosures at the 9th conference in September 2025, used to reflect industry background, not data from this conference)