
Weekly Notables
The macro backdrop improved this week, as ceasefire discussions between Israel and Iran helped ease concerns. The U.S. loan market, as represented by the Morningstar LSTA US Leveraged Loan Index (Index), returned 0.33% the seven-day period ended June 26. Firmer secondary prices were a key contributor to performance, with the average bid price of the Index increasing by 16 basis points (bps) to 96.88.
In the primary market, new-issue activity experienced an uptick, as arrangers launched a bevy of new refinancing transactions. Refinancing volume now has eclipsed $15 billion MTD, the most since February, with a few of the announced deals being from issuers that were recently upgraded from CCC. On the other hand, the forward pipeline of visible deals contracted further. Net of approximately $28.3 billion of anticipated repayments that aren’t associated with the forward calendar, repayments currently outstrip supply by roughly $10.5 billion, compared to repayments outstripping supply by $5.1 billion last week.
Trading in the secondary market remained active this week, while levels firmed across all rating categories. However, Single-Bs were quoted higher on average relative to other ratings. Investor demand continued to a healthy clip across the measurable segments. Seven more CLOs priced this week, which brings June issuance to $12.5 billion and YTD issuance to about $97 billion. Meanwhile, retail loan funds posted a modest $53 million inflow, according to Morningstar, primarily attributable to ETFs.
There were no defaults in the Index this 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).