A $330 million leveraged loan for two units of methanol maker Consolidated Energy Ltd. is being offered at the steepest discount since 2023, according to market sources. The loan, which was initially marketed earlier this year, is now being sold at a significant markdown to attract buyers in a challenging credit environment.

This markdown represents the largest discount for a similar-sized leveraged loan in over two years, signaling potential concerns about the borrower's credit profile or broader market conditions. The methanol industry has faced headwinds from fluctuating energy prices and supply chain disruptions, which may be contributing to the loan's discounted pricing.

Market participants are closely watching this transaction as an indicator of credit market sentiment. The steep discount suggests lenders are willing to accept substantial losses to offload risk, reflecting broader caution in the leveraged loan market. This development could have implications for other energy sector borrowers seeking financing in the current environment.