Booming debt markets throughout 2021 helped drive a record-breaking year of deal-making activity. Borrowers across industries, geographies and credit ratings maintained access to financing on historically attractive terms. We mark the New Year by looking at developments driven by the roaring debt markets, and considering what lies ahead as the calendar turns.
The Financing Markets in 2021: Record Breaking
Undeterred by the second year of the pandemic, 2021 was a record breaker for financing markets. New issuance volumes for both high-yield bonds and loans set full-year records before Thanksgiving, and those record high volumes were accompanied by record low yields. Investment grade bond issuance levels were the second highest on record, eclipsed only by levels reached in 2020.
The attractive financing available in 2021 supported dealmaking at an all-time record pace, including M&A transactions such as Salesforce.com’s $27.7 billion acquisition of Slack; Jazz Pharmaceuticals’ $7.2 billion acquisition of GW Pharmaceuticals; ii-vi’s $7.0 billion acquisition of Coherent; IAC’s $2.7 billion acquisition of Meredith Corporation’s National Media Group; Herman Miller’s
$1.8 billion acquisition of Knoll; and Siris Capital’s innovative $1.5 billion double-acquisition of Equiniti Group and American Stock Transfer & Trust Company. The financing markets also supported other types of M&A activity, including XPO Logistics’ $7.8 billion spin-off of GXO Logistics and the $9.3 billion “Reverse Morris Trust” transaction between 3M’s food safety business and Neogen.
