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US Loan Market Snapshot - April 2017

21 April 2017 | Invesco Senior Secured Loans team

Despite market volatility over the past two weeks, senior secured loans ended the month relatively flat, returning 0.08% in March and 1.15% year to date (Credit Suisse Leveraged Loan Index in USD).

The softer tone for loans versus recent months was contagion from a pullback in high yield where oil price volatility and significant high yield outflows drove declines. In a month characterized by a re-appearance of volatility, loans outperformed its peer asset classes. The 10 year Treasury returned -0.12%, the High Grade Bond Index returned –0.12%, and the High Yield Bond Index returned –0.21%. The 10 year Treasury yield held flat at 2.39%, despite rising to 2.62% intra-month. Unlike in past months, loans’ lower yielding, higher quality BB (0.12%) and B (0.16%) ratings categories outperformed the CCCs (–0.43%)1, as lower quality commodity related issuers experienced relatively more pressure. The average price in the loan market was US$98.30 at the end of March. At the current average price, senior secured loans are providing a 6.10% yield.

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Tags: Fixed income