United shifts $1.5b from bonds to loan offering

United has shifted the majority of its $9b junk-debt sale to leveraged loans, the latest company to seek more flexible financing in the floating-rate assets. The size of the bonds shrunk to $4b total, split evenly between five- and eight-year maturities, according to people familiar with the matter. The term loan due 2028 has now grown to $5 billion, up from $3.5b, the people said, asking not to be identified discussing a private transaction. United’s loan has more restrictions than usual since it can’t be repaid for one year unless investors are compensated for missed future interest payments, but the bonds can’t be repaid for the entire length of the maturity without a similarly costly fee. Leveraged loans have seen fierce demand from funds that have taken in cash for 13 consecutive weeks, the longest streak since 2018, as well as from collateralized loan obligations, the biggest buyers of the risky debt, following record issuance. Loan prices have also been rising, hovering near the highest level in more than two years, as investors turn to floating-rate products for higher returns amid rising Treasury yields.<br/>