One of Wall Street’s Riskiest Loan Markets Shows Signs of Life

One of the riskiest corners of Wall Street’s corporate-finance machine is showing signs of emerging from a deep freeze.

Last month, Bain Capital became the first this year to sell a new buyout loan with a B3 rating from Moody’s Investors Service — a level deep into junk grade — when it raised $550 million for its acquisition of Brazilian restaurant chain Fogo de Chão. That’s now being followed by a similarly rated $505 million deal for American Securities’ acquisition of Aramsco Inc., which is expected to price in the coming days.

While the volatility that’s raced through markets ...