Avaya Sticks the Highest Coupon of the Year on a Leveraged Loan

Avaya Holdings Corp. is offering the highest margin of the year on a leveraged loan that will refinance an upcoming convertible bond maturity, another sign of how much borrowing costs have risen for risky US issuers during a rout in credit.

The communication software company’s $350 million loan is now being offered at 1,000 basis points over the Secured Overnight Financing Rate, up from 900 basis points previously, according to a person with knowledge of the matter, who asked not to be identified discussing a private transaction.

That marks the highest coupon seen in the US leveraged loan market so ...