As has been reported, leveraged loan issuance has been soaring amid sustained investor liquidity. At the same time, new-issue yields have been plummeting. The average yield of January’s new-issues – which includes many refinancings and repricing transactions – plunged to 5.08%, from 6.02% in December. and to the lowest level since the credit crisis. It is technically the lowest average yield recorded since LCD began tracking these data in 2002, with three-month LIBOR at a mere 30 bps.
[...] This seemingly bottomless market liquidity, of course, has taken its toll on investors. Indeed, yields on leveraged loans are at their lowest level since the financial market meltdown of 2008-09. [...]