Weekly Notables
Heading towards quarter-end and the onset of the summer slowdown, performance in the loan market was more muted this week. The Morningstar® LSTA ® US Leveraged Loan Index (Index) returned 0.08% for the seven-day period ended June 27. The average bid price decreased by 12 bp, finishing out the week at 96.55. On a YTD basis, the Index has returned 4.30%.
The primary market was slightly busier than last week, as $15.6 billion of new supply launched over the course of the week. Unsurprisingly, refinancing transactions were about $13.3 billion of this week’s total issuance. In the forward calendar, net of the anticipated $15.2 billion of repayments not associated with the forward pipeline, the amount of new supply projected to enter the market is about $14 billion, up from last week’s net new supply of $8 billion.
Secondary trading was quiet this week. From a ratings perspective, there was some dispersion in performance among rating cohorts this week. Double-B loans were ahead of all other categories with a return of 0.13%, while Single-Bs returned 0.09%. In contrast, CCC posted a negative return of 0.39%.
CLO managers priced five new deals during the week, bringing the YTD volume to $101.4 billion. According to Morningstar, retail loan funds outflows moderated, as $16 million exited the market for the week ended June 26, as compared to $223 million in prior week.
There were no defaults in the Index during the week.
Source: Pitchbook Data, Inc./LCD, Morningstar ® LSTA ® Leveraged Loan Index. Additional footnotes and disclosures on back page. Past performance is no guarantee of future results. Investors cannot invest directly in the Index. *The Index’s average nominal spread calculation includes the benefit of base rate floors (where applicable).