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Investors Pour Whopping $1.7B into US Leveraged Loan Funds

US loan funds

U.S. leveraged loan funds recorded an inflow of $1.76 billion in the week ended Dec. 7, according to the Lipper weekly reporters only. This is the largest single-week inflow since August 2013 and follows a $1.12 billion inflow from two weeks ago.

Despite a weak start to 2016, flows have been solidly positive in the second half of year, and particularly in recent weeks. The three largest inflows of the year have been recorded in the last four weeks. The weekly average over that span is $971.2 million, up from $519.7 million last week.

Inflows have now been recorded in 28 of 49 weeks this year.

ETF flows were a record high $559.9 million of the total this week, or 32%, while $1.2 billion flowed into mutual funds.

Year-to-date inflows to leveraged loan funds are $2.31 billion, based on outflows of $1.28 billion from mutual funds against inflows of $3.59 billion to ETFs, according to Lipper.

The change due to market conditions this past week was positive $343.8 million, the highest since the week ended July 13. Total assets were $75.5 billion at the end of the observation period. ETFs represent about 17% of the total, at $12.8 billion. — Jon Hemingway

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This story first appeared on www.lcdcomps.com, 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.

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Another Gain for US Leveraged Loans; MTD Return = 0.49%

Loans gained 0.05% today after gaining 0.12% yesterday, according to the S&P/LSTA Leveraged Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.05% today.

Loan returns are 0.49% in the month to date and 9.44% in the YTD.

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This story first appeared on www.lcdcomps.com, 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.

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Leveraged Loans Gain Another 0.09% Today, Extending Win Streak

Loans gained 0.12% today after gaining 0.09% yesterday, according to the S&P/LSTA Leveraged Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.16% today.

Loan returns are 0.44% in the month to date and 9.38% in the YTD.

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This story first appeared on www.lcdcomps.com, 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.

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US Leveraged Loans Gain 0.09% Yesterday; YTD Return Grows to 9.25%

Loans gained 0.09% today after gaining 0.08% yesterday, according to the S&P/LSTA Leveraged Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.11% today.

Loan returns are 0.32% in the month to date and 9.25% in the YTD. – Staff reports

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This story first appeared on www.lcdcomps.com, 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.

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For Sale: Assets in Patriarch Partner’s Defaulted Zohar CLO

A total of 133 line items of assets in the Zohar I CLO which was formerly managed by Patriarch Partners are set to be auctioned this Friday, Dec. 9 at noon EDT, according to a notice from the trustee, U.S. Bank.

You can download a pdf of the assets here.

Duff & Phelps Securities LLC will serve as the liquidation agent.

The auction is expected to shed some light on the value of assets on privately held issuers that in some instances were among the former collateral manager Patriarch’s many portfolio companies. The internal valuation methods employed by Patriarch on its three Zohar CLOs had previously garnered the attention from the Securities and Exchange Commission (SEC), which in March 2015 brought fraud charges against the manager and Patriarch’s CEO and founder, Lynn Tilton.

The Zohar I CLO had previously defaulted on Nov. 22, 2015, and Alvarez & Marsal Zohar Management took over as collateral manager on all three of the Zohar CLOs in February from Patriarch.

The securities to be auctioned include the term loans and equity interests in a number of companies that are privately owned, in some instances by Patriarch Partners themselves such as MD Helicopters, Inc.; Duro Textiles, LLC; and Xinhua Sports & Entertainment.

Interested investors can have the opportunity to meet with the management of the companies for sale subject to a confidentiality agreement by contacting the liquidation agent, Duff & Phelps.

U.S. Bank notes that there is still ongoing litigation across different courts creating uncertainty over the actual rights or transferability of the assets for sale. Those cases include Patriarch Partners Agency Services LLC v. Zohar CDO 2003-1 in the Southern District Court of New York. Patriarch Partners is claiming in its suit that under the governing documents, Patriarch’s removal as an administrative agent was invalid and therefore the sale of assets cannot be conducted.

Potential investors must also be wary that they may not have the full purview of the collateral in the Zohar I CLO. Alvarez & Marsal as collateral manager is also in litigation against Patriarch in the Delaware Court of Chancery in Zohar CDO 2003-1 v. Patriarch Partners LLC, claiming that Patriarch is still withholding critical documents providing more details about the holdings of the Zohar CLOs after it resigned as collateral manager on all of them.

Patriarch Partners also filed for an appeal on Nov. 28 to the Supreme Court of Delaware arguing that the trustee, U.S. Bank, has no right to transfer the equity interests of a number of private companies in the Zohar CLOs.

MBIA, who serves as a guarantor on the Zohar I CLO, is expected to use the proceeds from the sale towards paying its expected upcoming claims on the Zohar II CLO which matures on Jan. 20, 2017 (subscriber link) that it is also on the hook to insure. — Andrew Park

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This story first appeared on www.lcdcomps.com, 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.

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US Leveraged Loans Return 0.08% Today; YTD Return Hits 9.15%

Loans gained 0.08% today after gaining 0.07% on Friday, according to the LCD Daily Loan Index.

The S&P/LSTA US Leveraged Loan 100, which tracks the 100 largest loans in the broader Index, gained 0.09% today.

In the year to date, loans overall have gained 9.15%.

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This story first appeared on www.lcdcomps.com, 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.