Amid Credit Rebound, US Leveraged Loan Prices See Record Gains

The U.S. leveraged loan asset class, which just stumbled through its worth month in seven years, saw a record one-day gain on Friday, with the S&P/LSTA Loan Index advancing 0.94%.

That movement marks a dramatic whip-saw for loans, which have seen a rout over the past two months as fears of a broader economic slowdown took root. On Friday, however, at least two high-profile economic yardsticks buoyed the financial markets, as the December jobs report of plus 312,000 topped expectations, as did wage growth of 3.2%.

The 0.94% gain in loans was more than twice the prior record, a 0.46% advance on Dec. 18, 2014, amid a volatile period for the asset class, due in part to plunging oil prices.

To put Friday’s gain in perspective, U.S. leveraged loans lost a total of 2.54% in December, helping wipe out advances seen throughout the year. For all of 2018 leveraged loans returned 0.44%, the third-worst showing since the inception of the S&P/LSTA Index, 19 years ago.

Try LCD for Free! News, analysis, data

Follow LCD on Twitter.

LCD comps is an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

Leave a Reply

Comments are moderated and will not appear until the admin has approved them.