Weekly Notables
The loan market moved higher this week. The Morningstar® LSTA® US Leveraged Loan Index (Index) returned 0.24% for the seven-day period ended October 17, bringing the YTD return to 7.27%. The average Index bid price gained 9 bp, finishing the week at 97.01 (the highest average bid price in 2024). The Index hasn’t reached that level since 2022.
While repricing related activity continues to be prevalent, the primary market has also seen an influx of acquisition-related deals. New-issue supply increased to $13.5 billion this week, with $6.2 billion tied to M&A and LBOs. In addition, there were 14 repricing transactions occurring during the week. In the forward calendar, net of the anticipated $10.8 billion of repayments not associated with the forward pipeline, the amount of new supply projected to enter the market is about $8.7 billion, versus $8.1 billion last week.
The secondary market was steady this week. Lower-rated credits were in the lead, as both Single-Bs and CCCs returned 0.27%, followed by Double-Bs with a return of 0.17%.
There were seven new CLO deals that priced during the week, bringing the YTD tally to $149.7 billion. According to Morningstar, retail funds received a large inflow of $565 million for the week ended October 16. This is the largest weekly inflow since mid-July. In addition, investors added $661 million to ETFs during the week. On a YTD basis, loan funds have experienced a net inflow of $3.7 billion.
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).