Cloud 9fin Syndication Nation — Looking ahead to 2026 with BlackRock’s Mitch Garfin
Dec 29, 2025
Mitch Garfin, co-head of leveraged finance at BlackRock, shares his insights on the evolving landscape of high-yield bonds and leveraged loans. He discusses the dominance of leveraged loans due to issuer preferences and refinancing activity. Mitch highlights the increasing role of private credit and the complexities of dual tracking deals. With a focus on monetary policy and inflation risks, he forecasts a busy year ahead for refinancing and M&A. Mitch also evaluates risks in data centers and AI's impact on software credits, offering invaluable tips for investors looking to navigate the market.
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Loans Offer Flexibility Over Bonds
- Issuers favored leveraged loans in 2025 because loans offer more flexibility and shorter soft-call protection than high-yield bonds.
- Repricing in the loan market and faster ability to use asset-sale proceeds drove large loan supply and refinancing activity.
High-Yield Has Upgraded, Loans Filled The Gap
- The high-yield market has materially upgraded in credit quality over two decades toward more BBs and fewer CCCs.
- Lower-quality borrowers migrated into the leveraged loan market, flipping the loan quality mix toward more single-Bs.
Private Credit Competes On Flexibility, Not Quality
- Private credit competes with public markets by offering customization, speed, and large ticket sizes rather than simply weaker underwriting.
- Many companies dual-track public and private options, expanding overall leveraged finance capacity.