CLO Managers Bet Big on Deal Revival to Lift Profits in 2026 (1)

A flare up in high-profile corporate buyouts is likely to spread into 2026, spurring demand for leveraged financing that could double by some estimates, according to debt managers.

Managers of collateralized loan obligations are banking on falling borrowing costs, rekindled M&A activity and looming debt maturities to fuel demand for the debt, which private equity firms and other buyers often use for leveraged buyouts and mergers. That’s even as a mismatch in supply and demand, and tightening spreads on leveraged loans have made returns challenging.

JPMorgan Chase & Co. analysts estimate M&A and LBO volume to double next year to ...