CIBC Capital Markets’ Alfred Traboulsi leads the year-end discussion with US Corporate and Investment Banking product leads on key highlights from the markets in 2025. The panel highlights strong market activity, resilient performance across sectors, and share insights on opportunities and risks for the coming year.
CIBC Perspectives
Year end Review and 2026 Outlook – US Financing & Advisory
Alfred Traboulsi
Managing Director and Co-Head, Global Corporate and Investment Banking, CIBC Capital Markets
Hello, everyone. I'm Alfred Traboulsi, Co-Head of the Global Corporate Investment Banking Division at CIBC Capital Markets. At CIBC, we're here to help you navigate the complexities of the market and achieve your objectives. So, I'm very pleased to lead today's 2026 outlook on the financing landscape, where we'll hear from Greg Ogburn for our US Equity Capital Markets, from Brad Austin, for our Leveraged Finance Business, Ines de Almeida Serrao for our Project Finance Business, and Mike Kim, for our DCM business.
Our experts will do a quick recap of their observations over the past 12 months and share key themes they're seeing as we head into 2026. I know we have a lot to discuss, so let's get started. Greg, please start off with a quick overview of the US ECM market this past year and your thoughts on the key trends that are shaping things for 2026?
Greg Ogborn
Managing Director, Equity Capital Markets, CIBC Capital Markets
Yeah, absolutely Alfred. Thank you. So, 2025 was a great year for US ECM across all products. IPOs, Follow-Ons, Converts... And that’s despite the tariff disruption we saw in April. And then the longest ever US Government shutdown and US ECM activity was still impressive. And in the case of Converts, the activity was actually record setting this year. So, let me first hit some stats and then transition into, the market themes. So, in terms of the IPO market, looking at traditional IPOs, we've seen 67 deals raising about $35 billion in proceeds this year. And notably, about one third of the flow came Q3 this year. Momentum was interrupted in Q4, of course, by the government shutdown. And this, activity this year represents about a 20% uptick, over IPO activity in 2024. Of course, it's not just about, you know, deal count. We want to see deals come to market and work for both the issuers and investors. And we saw that in 2025 as well. Over 90% of IPOs, over $100 million, priced at or above the targeted valuation range. And moreover, the IPO returns have been encouraging. Class 2025, has returned about 20% this year, which nicely outpaces the S&P 500, 16.5% return, year-to-date.
So, shifting to convert stats, simply put 2025 was a record setting year for volume at about $110 billion in proceeds. We eclipsed the previous record, which was set in 2020, for $104 billion. Finally, on the Follow-On market, it was active as well, the deal count, in 2025 was slightly below what we saw in ‘24. But the deal volume was up year-over-year, and much more balanced. There was a balance of sponsor sell downs, as well as primary capital raises in the Follow-On market. So, moving on to the key trends and themes, as we get ready to flip the calendar to 2026... Look, I characterize the investor posture right now as ‘risk-on’, while still selective and measured. There's been a demand for sort of, on trend sectors, and that's continuing as companies tied to AI and the associated infrastructure, cloud software, fintech, defence tech and crypto garnered outsized attention this year. And at a time, you know, as we all know, valuations of the established tech giants are in the stratosphere, investors are keen, to welcome new issues as a chance to get exposure to innovation, at more reasonable entry prices. Another encouraging trend that we expect to continue in earnest in ‘26, is the return of sponsor backed IPOs.
(Private Equity) backed deals, more than doubled in ‘25 as compared to what we saw in ’24. So, on the demand side of the equation, institutional investors still have access, to excess cash and are eager for new opportunities to deploy, that capital while maintaining that disciplined approach that I referenced. On the supply side of the equation, the backlog of ready to go companies is enormous. Following, you know, what we all know is a dearth of issuance in the years following the 2020 to 2021, equity capital markets boom. The macroeconomic conditions may well be a tailwind for ECM activity in ‘26. With The Fed funds rate expected to be about 3% at this time next year. That will support higher equity valuations and create an even more welcoming environment for additional ECM activity. The companies that are planning to come to market, those that are in the pipeline are much more mature and better vetted than what we saw, sort of during that last, big wave during the pandemic. And we're seeing quality growth at scale with, a reasonable valuation that that gives sufficient upside potential. That's what's going to be necessary to sort of garner the quality, robust institutional demand that we want to see to price successful transactions.
So lastly, I'll just comment on the sectors that we expect to be in focus, moving into ‘26. One, that would be the tech space, particularly those leveraging, AI advancements, digital finance platforms, and enterprise software. The second sector will be, industrials and defence, I think is a renewed interest in hard asset industries. And finally, sustainable infrastructure, energy transition as well as, the traditional energy sectors are expected to be active as well, though of course, we will need to be mindful there of potential impacts, you know, resulting from evolving policies, in Washington. So all-in-all, a great 2025. And there are many, many reasons to be excited for what we can expect to see in 2026 in ECM.
Alfred Traboulsi
Managing Director and Co-Head, Global Corporate and Investment Banking, CIBC Capital Markets
Greg, thank you. As an ECM banker at heart, I can feel the excitement for, for next year. Brad, over to you. Tell us a bit more, your perspective on the US leverage finance market.
Brad Aston
Managing Director & Head, Global Leveraged Finance, CIBC Capital Markets
Sure. Thanks, Alfred. So, as we look at where the LevFin markets currently stand here at the end of 2025, I think it's important to level set. First on secondary trading levels. So, the high yield index, which represents a composite of all the outstanding sub investment grade bonds in the market, is currently trading at 6.6%. That's about 50-basis points tighter year-on-year. And the spread component of that index is at about 275-basis points today. That's approximately flat versus early January. So, all the index compression we've seen in the market has been base-rate driven.
A year ago we would have predicted that base rates would come down in 2025. So, we are right about that. But over the last ten years, high yield spreads have only been in this sub 300-basis points zipcode for about less than 5% of the time. So, what is surprised us this year is that spreads have held in at these long-term historical tights, in spite of a declining rate backdrop. And I think this reflects a similar risk on tone in the LevFin market that Greg sort of referenced in his comments around ECM. Last note in terms of the year end secondaries, it hasn't been all smooth sailing. Again, similar to equities, we've had pockets of volatility in 2025. In the Tariff Tantrum of late March and early April, high yield spreads blew out by about 150-basis points in two weeks. And then, in October and early November, as the US government shutdown dragged on, we had a 50-basis point move in the market. In a similar compressed time frame as, the investors became more and more concerned about the potential impact on the economy. I think what's really notable, though, in both cases, has been the strength and speed of the market recovery. And I think that's been a similar theme as well in the equity markets this year.
So, very resilient market backdrop. And I think for directional trends, all these comments have made in the high-yield market also apply to leverage loans, which is actually a much bigger component of the leveraged finance markets globally. Debt levels in the loan market are substantially unchanged year-over-year. But the key reference rate for the market, which is three months SOFR (Secured Overnight Financing Rate), is down about 60-basis points. And so, spreads over the course of this year have have trended tighter, as reflected by the over $450 billion of loan repricing volume we've seen clear the market this year. So what's been driving, those secondaries? I think the technical backdrop is one component of it. We've had a very strong, supportive technical environment for the last two years. CLO issuance of $190 billion this year is on pace for 2024, and well over 50% above ‘23 and ’22 levels. And the same is the case for high yield funds flow.
So in both the high yield and loan markets, the buy side is flush and they aren't getting paid to hold treasuries in cash. And so they've been very much leaning into pricing in terms of new money deals and and refinancings alike. With that constructive backdrop it's not a surprise, we've seen healthy new issue volumes in the leverage finance markets in 2025. Year-to-date, combined supply of $750 billion is up slightly versus 2024. And it's back to pre-COVID 2020 timeframe levels where M&A was actually playing a much bigger role in the market. So dialing in to that point, which I think is an important catalyst for leveraged finance more broadly, acquisition driven primary volumes were about $190 billion this year, so that's only about 25% of supply. That's down materially from pre-COVID levels, where we would routinely see, event driven volumes of +40% percent of the market. When we double click into sponsor related activity, the sponsor related volume share was down year-over-year to 46% of the market versus 50% plus last year. And that's been driven by moderate LBO activity and a decline in refinancing volumes, as sponsors have been very active in managing their capital structures over the last 2 to 3 years, with refinancings, repricings and extensions.
To touch upon the market dynamics between the broadly syndicated and private credit markets, which is always a key theme. By deal count, private credit continues to dwarf the broadly syndicated market given its stranglehold on the lower and middle market size transactions. But 2025 is the second straight year where aggregate dollar volumes in the leveraged loan market, dwarfed, private credit supply with $290 billion of institutional supply for PE impact activity, versus $177 billion in the private credit market. So, a significant, outperformance for the broadly syndicated markets in 2025, from that perspective. And over the last couple quarters, we've seen green shoots in terms of M&A and LBO volumes. And so as we head into the new year, we'd expect that to be a catalyst. To talk about 2026, in a little bit more detail.
As we look into that, our observation is that dealmaking conditions continue to improve. The Fed has already cut rates twice this year, and we could potentially see a third cut this month that's paired with better clarity related to tariff related implications. And over $1 trillion of PE dry powder that's available going into January. And so that's beginning to align the stars for sponsors to put capital to work at scale. And we've seen that in recently announced mega transactions for the likes of Electronic Arts and Hologic. So, we think those factors, combined with the ongoing rate cut cycle, should be expected to drive stronger event driven volumes in 2026. And the same is true on the corporate side of the ledger, where, companies have a lot more visibility into their performance through the tariff cycle and the outlook for demand going into the new year. So, it's been a very strong year in 2025 for the leveraged finance markets. And were constructive on the outlook for ‘26. We see volumes in aggregate up 10 to 20%.
Alfred Traboulsi
Managing Director and Co-Head, Global Corporate and Investment Banking, CIBC Capital Markets
Right. Thank you. And I'd be remiss not to mention that our own activity has followed those very positive trends. And what when we look at our pipeline, we're very, very excited about ‘26. Now, over to you Ines.
Ines, please talk to us about the project finance markets here in the US, Ines, please talk to us about the project finance markets here in the US, and what are the trends that you've continued to see in particular as, the landscape has shifted, when it comes to the type of energies, that has been more favoured or less favoured.
Ines de Almeida Serrao
Managing Director, Co-Head of US Project Finance & Infra, CIBC Capital Markets
Great, thank you, Alfred. 2025 was, in fact, a very exciting year for project finance. And I know I'm biased and but there's a lot we can talk about, so I'll try to keep us focused on a few key points, some of which will overlap with what Brad and Greg described, which is natural. The key message is that 2025 was the year of digital infrastructure and power, which goes to the question you were specifically asking Alfred. These sectors have driven record volumes, and which have been occurring for the past three years, but are showing no signs of slowing down. And while the market had to deal with uncertainty. And I'll talk more about that, shortly, it has remained extremely resilient. And I'll talk more about that, shortly, it has remained extremely resilient. So, first to drill down on volumes and put things into perspective, 2025 year end is expected to close at around $375 billion, in terms of US project finance volumes. This is up from $185 billion in 2023 and $295 billion in 2024. So that means that the market nearly doubled in volume in two years, which is remarkable.
Private credit, has been taking an increasing share of the market, but banks remain very active in the space. In this continued high volume has resulted in pressure on resources, including human resources like sponsors, construction crews, lawyers, consultants and bankers, as well as on the supply chains. But not only have volumes been at record high, we're also seeing the size of the deals grow significantly. If we go back ten years, for those of us who remember, the largest PF deal in 2015 was the Cheniere-Corpus Christi LNG, which was about $4.5 billion in debt. And in 2025 to date, the largest PF deal was $27 billion... The Meta-Blue Owl data centre, which is almost seven times as large. Turning our attention more in depth into the main sectors I mentioned. So, digital infrastructure fueled by AI is definitely driving power demand. And power demand is growing for the first time in a generation in the US, and that's creating the need for a substantial amount of new power projects. And that means not just renewables that have been the focus of the market until recently, but also other sources of power as well, like, gas.
So, the ‘all of the above’ power strategy is now required to meet the new power demand expectations. And while renewables still has the largest share of new builds, about 70% per our estimations, gas is expected to become a bigger share of the pie in coming years as two things happen... One, permits come in and supply chains adjusts and suppliers are able to start delivering gas turbines. Other technologies like nuclear are expected to return as well, but that has a much longer timeline, expected for new builds. But we're very excited to see the progress there as well. And finally, I would be remiss not to mention LNG. And in 2025, six projects in the US have reached FID, final investment decision, which is a record and this was fueled by, international demand for LNG. I want to mention two other points that are related, with macroeconomic contexts, driven by the new administration. And first is the passage of the One Big Beautiful Bill on July 4th.
The months leading to the passage of the bill, were a period of high uncertainty, especially for the renewables market. But based on feedback we've been getting from our clients, the final version of the bill, was well received. Developers are now going through their projects that had previously qualified for tax credits, and the industry seems to be ready for the phase out of the credits, given the current demand for power. And second point, I want to mention related to this is the tariffs that have been mentioned before by the by Greg and Brad. The uncertainty related to the tariffs was definitely not easy to manage, but, and now it seems like the tariffs have been budgeted in to the projects. And we're no longer seeing disruption caused by that. This is of course subject to no more unforeseen changes related to that. So, I'd like to end the way I started and noting that increasing digital investments in growing power demand have allowed investments to continue to be supported by market demands, and CIBC is very happy to have been able to support our clients in 2025, which is reflected in our position in the league tables, and we look forward to continue to do the same in 2026.
Alfred Traboulsi
Managing Director and Co-Head, Global Corporate and Investment Banking, CIBC Capital Markets
Ines, thank you and congratulations to you and the team for, record year as well. So, thank you. Mike, over to you. Why don't you give us a brief overview of the US DCM market this past year and your thoughts about the trends that are shaping 2026?
Michael Kim
Managing Director, US Debt Capital Markets, CIBC Capital Markets
Sure. Thanks, Alfred.
So, similar to the other markets, this year was a really strong one in investment grade as well. We had a big volume year. We're going to finish with close to $1.65 trillion in investment grade bonds issued this year.
That'll end up being the second highest total of all time, only one higher being 2020, when all the COVID emergency funding was taking place. And just like the Equity and High Yield markets, we've had some bouts of sometimes pretty severe volatility around the same time frames that were mentioned, followed by extremely quick recoveries.
But for the most part, the primary markets have been open and active for most of the year. The overall pace of issuance has been consistently high. One thing that's been somewhat surprising, though, is that we've had a bit of a late surge of activity here in the fourth quarter.
Q4 issuance in investment grade is over $300 billion, which makes that an all time record for the quarter. I think the reasons behind that elevated number is that market conditions have just continued to get better and better throughout the course of this year.
Since April, most investment grade companies right now can issue bonds at or close to the lowest coupons they've been able to issue at all year. And actually, at the lowest levels they've been able to issue at in the last few years.
So right now, seeing a lot of our clients being opportunistic, taking advantage of this window, some are even pulling forward bond deals that they had planned for next year into this window to lock in coupons and take some risk off the table.
Taking a look at why that is. We've talked about The Fed cutting rates and the 60, 70-basis point rally we've seen in treasuries. But on the spreads side of the equation, we were already at historically pretty tight levels coming into the year for IG credit. Post April, we've seen a continued massive rally over the Q2, Q3 time frame, especially in the late spring and summer months. And the IG corporate bond index actually hit its tightest level since 1998, a few months ago, back in September.
Since then, we backed up a handful of basis points, but still very close to all time tight levels at the moment. So, that combination of lower treasury yields and historically tight spreads have obviously made it a very favourable environment on the issuance side.
And from an investor standpoint, even though spreads are thin, coupons are still attractive, especially compared to where the market was 4 or 5 years ago. But there's definitely kind of a hunt-for-yield that is still a theme for our investment grade investors.
They’re looking for yield any way they can, whether that means going further out the curve into longer dated debt, although we've seen less of that this year, or going down the credit spectrum into products like junior subordinated notes. That product is up in terms of volume by 35% year-over-year, and we expect demand for hybrids to continue well into next year as well.
But overall, demand from the buy side stayed really consistent throughout the year. We've seen almost nonstop inflows into IG funds... I don't see that slowing down anytime soon.
And that'll be a great headwind for the markets, because we're expecting an even busier year of supply in 2026. Estimates are still coming in at the moment from Syndicate Desk, and economists, but most are forecasting another banner year in terms of volume. Some estimates seeing close to $2 trillion in terms of supply. Those types of numbers would make it the biggest issuance year of all time.
And one of the drivers behind this higher forecast is AI related CapEx funding. It's the big topic everywhere these days, but it's been an especially big topic in the investment grade market recently because we just had a string of jumbo size deals hit from some of the marquee big tech names.
Oracle started it off in late September, but in the last month or so, we've seen Meta, Alphabet, Amazon and Verizon, all do jumbo size offerings in the range of $10 to $30 billion for each one.
Just those five names ended up pricing about $100 billion in US dollar bonds in the span of a couple of months. So for obvious reasons, I think a lot of attention next year will be on this type of hyperscaler issuance. Everyone is expecting much more of this to come and as the sector continues to get bigger and bigger, and a bigger part of the index, I think it's safe to say that it’ll have a bigger day-to-day impact on the overall markets as well.
Even away from the pure tech names, financing needs for other verticals like energy, and power, and utilities, for example. Those sectors are also growing rapidly because of the data centre story as well. And they're going to have a lot more CapEx funding to do, too.
So in summary, we're expecting very large volumes next year in the investment grade market. Activity is going to be high once again. But there is high confidence right now that the market set up to absorb that supply. And there's a lot of optimism that we'll continue to have supportive conditions again next year.
Alfred Traboulsi
Managing Director and Co-Head, Global Corporate and Investment Banking, CIBC Capital Markets
Team. Thank you. That's been a very, insightful conversation. When we look back at ‘25 and at our performance, we see two trends. The first is a significant surge in AI, energy and infrastructure spending, an ecosystem CIBC happens to be at the heart of, and have continued to rise in prominent roles in specific areas of project finance, debt capital markets, and advisory. The second trend we see is the increasing dominance of private debt and equity capital that is fueling that spending growth. As those players are growing and going through their capital recycling, some of which is overdue, we would potentially see more consolidation of assets under management. We recognize that source of near-term volatility would remain, particularly those driven by geopolitics. It is clear to us that despite those risks, those two major trends are here to stay. Greg, Brad, Ines and Mike, thank you for a great discussion and insights. And thank you for our viewers for taking the time to watch this video. As always, please feel free to reach out to our team here at CIBC. We‘ll be more than happy to discuss your specific circumstances and opportunities for the coming year. Thank you.
CIBC PERSPECTIVES:
Year-end Review and 2026 Outlook – US Financing & Advisory
Hosted by:
Alfred Traboulsi, Managing Director and Co-Head, Global Corporate and Investment Banking, CIBC Capital Markets
With:
Greg Ogborn, Managing Director, Equity Capital Markets, CIBC Capital Markets
Brad Aston, Managing Director & Head, Global Leveraged Finance, CIBC Capital Markets
Ines de Almeida Serrao, Managing Director, Co-Head of US Project Finance & Infra, CIBC Capital Markets
Michael Kim, Managing Director, US Debt Capital Markets, CIBC Capital Markets