X Loans at Par Are Latest Example of Discounts Disappearing (1)

Loans to X Holdings Corp. that banks had on their books at big discounts just a few months ago are being sold at face value now, underscoring a growing concern for investors: Demand for leveraged loans is so strong that prices are soaring.

For new offerings, loans are increasingly being sold at essentially par, or 100 cents on the dollar. The average price on new loans in 2024 was 99.66 cents on the dollar, up from 98.42 cents the year before and 97.37 cents in 2022, according to Barclays Plc.

Loans sold with bigger initial discounts perform better than ...