Discounts Flip to Premiums for Europe’s Frothy Leveraged Loans

Banks are asking investors to pay a premium to buy a loan to Belgium’s Infra Group, another sign that red-hot credit demand is turning normal market conventions upside down.

Usually, banks sell loans at a discount to face value as a way to entice investors. In this case, they’re estimating that the €140 million ($164 million) deal may price as high as 25 basis points above par, according to a person familiar with the matter, who asked not to be identified because the discussions are private.

There’s only been three other cases in Europe this year in which leveraged ...