The U.S. leveraged loan market in June hit its sixth record amount in as many months, totaling $1.05 trillion, according to the S&P/LSTA Leveraged Loan Index.
The U.S. loan market has grown dramatically since the financial crisis, by some 75%. It now comprises more than 1,000 issuers. In the past few years that growth has been driven both by institutional investors and by retail investors. On the institutional side, issuance of collateralized loan obligtation vehicles has skyrocketed, while retail investors have flocked to loan funds and leveraged loan ETFs over the past few years.
Overall, interest in the market has increased due to expectations of continued rate hikes by the Fed. A rising rate environment tends to boost interest in a floating-rate asset class such as leveraged loans. – Staff reports
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