With issuers continuing to flock to the floating-rate leveraged loan market, U.S. issuance of fixed-rate high yield bonds slid to $14.5 billion in June, the third straight monthly decline and the lowest level for this time period in five years, according to LCD.
During 2018’s first half, U.S. high yield issuance was $110.6 billion, down 23% from the same period in 2017.
Would-be high yield investors and issuers have turned to the leveraged loan market amid expectations of continued interest rate hikes by the Fed and as LIBOR – the rate over which leveraged loan borrowing costs are based – has climbed throughout much of 2018. Both of these factors have boosted investor interest the floating rate class.
This story was excerpted from analysis by LCD’s Jakema Lewis
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