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The middle market is blowing away most preconceived notions of what can and can’t clear the market today. Leverage offers one measure of how accommodating the market is, and while the numbers don’t show it, the shadow market has set new outer limits for highly regarded, sponsored names.

Sears Holdings (NYSE: SHLD) announced its concerns on Tuesday about its ability to stay afloat after years of losses and declining sales. The U.S. retail giant has failed to turn an annual profit since 2011. At the end of its fiscal year in January, the company had said that it was hoping to reduce its costs by $1 billion and cut its debt and pension obligations by at least $1.5 billion. It currently has liabilities totalling around $13.19 billion. In efforts to boost its liquidity, Sears said that it has taken action to sell its Craftsman tool brand for $900 million  to Stanley Black & Decker Inc (NYSE: SWK).

Hub holdings, LLC announced that it will increase its senior secured term loan by $375 million to refinance current oustanding debt. The proceeds will be mainly used to make payments on $300 million of second-lien secured notes and around $60 million of revolving credit. Following the announcement, Moody's announced that it would affirm the B3 corporate family rating and change the outlook on the debt from negative to stable. This outlook is based on the company's EBITDA growth and the feeling that they will be able to continue to reduce their leverage in 2017.

Level 3 Financing, Inc. , a wholly owned subsidiary of Level 3 Communications, Inc. (NYSE: LVLT), announced last week that it successfully refinanced its outstanding Term Loans through the issuance of a new TLB L+225/2024. The company anticipates approximately $35 million of cash interest expense savings on an annualized basis through this $4.61 billion senior secured agreement. At the day of issuance, ADI loan pricing services quoted an end of day bid for the loan at 99 3/4. Since then, the loan has traded up to a bid of 100 5/8 in the week and half since its first quote.

This past Friday, Avaya Inc., announced that it had filed for Chapter 11 bankruptcy protection in attempt to reduce its load of $6.3 billion in debt. The telecommunications company has been burdened by debt since an $8.2 billion buyout in 2007 by private equity companies, Silver Lake Partners and TPG Capital. Looking at intraday broker loan quotes on Avaya's L+525 2020, today's market opened at a 83 7/8 bid and 84 5/8 offer. Since then, the market has trended down to most recently a 83 1/2 bid and 84 offer. The L+750 DIP remains constant at 102 3/4 and 103 1/2.