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Tags: leveraged | loans | junk | invest

Leveraged Loans Take Biggest Loss in 2019, Outperform Junk

Leveraged Loans Take Biggest Loss in 2019, Outperform Junk
(Karin Hildebrand Lau/Dreamstime)

Tuesday, 04 June 2019 08:28 AM EDT

U.S. leveraged loans in May had their worst monthly performance since December yet still managed to do better than both junk bonds and equities.

The benchmark S&P/LSTA Total Return Index fell 0.22% in May versus a rise of 1.65% in April, and an increase of 0.17% in May 2018.

May was the second month of negative performance this year, as returns were down 0.17% in March.

That compares last month to a 1.19% drop in junk bond returns, and a 6.57% fall in the S&P 500. For the year loans have earned a return of 5.49%. That has allowed them to make up all of the ground they lost at the tail end of last year.

There was robust demand from CLOs for leveraged loans. New CLO formations were $10 billion last month, according to Bloomberg data. Mutual funds and ETFs continued to have moderate outflows.

Loan launches in May hit a seven-month high at $40.2 billion, yet were down year-over-year. Excluding repricings, there was $21.5 billion of new money deals and $14 billion of refinancings launched last month. That compares to $41 billion of new money deals and $12.3 billion refinancings in May 2018.

© Copyright 2024 Bloomberg News. All rights reserved.


InvestingAnalysis
U.S. leveraged loans in May had their worst monthly performance since December yet still managed to do better than both junk bonds and equities.
leveraged, loans, junk, invest
195
2019-28-04
Tuesday, 04 June 2019 08:28 AM
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