JPMorgan Chase & Co. led a group of banks in selling a $500 million leveraged loan for Mativ Holdings Inc. at one of the year's steepest discounts, signaling waning investor appetite for risky debt. The markdown reflects broader market volatility that has made investors more cautious about junk-rated corporate debt.

Leveraged loans typically offer higher yields to compensate for increased risk, but recent market turbulence has shifted investor sentiment. Banks are now struggling to place such loans at favorable terms, forcing them to accept deeper discounts than initially expected. This trend could signal tightening credit conditions for highly leveraged companies.

The steep discount on Mativ's loan underscores the challenges facing the leveraged finance market as investors reassess risk amid economic uncertainty. Companies seeking to raise debt may face higher costs or need to scale back financing plans if the trend continues.