The market uncertainty brought about by tariffs has led to a freeze in the high-yield bond market, making it very difficult for high-risk companies to secure financing. On April 15, according to the Financial Times, Trump's tariffs have caused the high-yield bond market (junk bond market) to "freeze," as concerns about recession and market instability have led investors to avoid risk, resulting in tighter liquidity and making it hard for low-rated companies to sell bonds, with issuance volumes plummeting. LSEG data shows that only $13 billion in high-yield bonds and loans have been issued so far this month, far below the monthly average of $52.5 billion since 2021. Another sign of the freeze in the high-yield bond market is that Citigroup has suspended efforts to raise over $2 billion in high-yield bonds and loans through traditional debt managers, which were originally intended to fund private equity firm Patient Square Capital's acquisition of dental and veterinary health company Patterson Companies. Investor sentiment is that even if interest rates are high, they prefer to wait until the market stabilizes. Bob Kricheff, head of credit at Shenkman Capital Management, stated: "Everything is on hold; in this environment, no one is trying to price trades." Financing Channels Blocked, M&A Transactions Hit Hard Due to the blockage of financing channels, private equity firms are facing significant funding difficulties. Private equity firms typically rely on short-term loans provided by banks and use high-yield bonds as financing tools for M&A transactions, but now that the bond market is unable to provide financing, many M&A transactions cannot proceed. For example, the financing for HIG's acquisition of Converge Technology Systems and Apollo-backed ABC Technologies' acquisition of TI Fluid Systems have been forced to pause. Insiders revealed that large banks such as Citigroup, Morgan Stanley, and JP Morgan have withdrawn planned financing transactions and postponed support for high-risk M&A projects. Although the market saw a brief recovery after Trump announced tariff exemptions, this did not resolve the fundamental issues in the high-yield bond market. According to Ice BofA index data, the credit spread of high-yield debt (i.e., the difference between corporate borrowing costs and U.S. Treasury yields) surged to its highest level in nearly two years last week, reaching 4.61 percentage points, although it slightly retreated after Trump agreed to suspend some tariffs. Goldman Sachs raised its default rate forecasts for high-yield bonds and leveraged loans this year to 5% and 8%, respectively, up from previous estimates of 3% and 3.5%. Goldman Sachs' chief credit strategist Lotfi Karoui stated: "Although below typical recession levels, these forecasts are well above long-term averages, reflecting the multiple headwinds facing the leveraged finance market simultaneously." Risk Warning and Disclaimer The market carries risks, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances Invest based on this information at your own risk