High Yield Bond Issuance Resumes after 2-Week Lull
No CLO deals last week
Like leveraged loans, there were no collateralized loan obligation (or CLO) deals struck last week. Three CLO deals worth $1.3 billion had come through in the week ended September 4. Year-to-date, CLO deals worth $73.6 billion have been struck through 138 deals, according to S&P Capital IQ/LCD.
Leveraged loans funds see outflows
According to data from Lipper, leveraged loans funds saw outflows for the week ended September 9, making it the seventh such week in succession. The amount of outflows was $138 million, compared to net outflows of $573 million in the previous week.
With last week’s outflows, the year-to-date outflows from leveraged loans funds stand at $8.5 billion. Senior loans are tracked by the Invesco PowerShares Senior Loan Portfolio (BKLN) and the Highland/iBoxx Senior Loan ETF (SNLN). Loans of Avago Technologies Limited (AVGO), PetSmart (PETM), and DaVita HealthCare Partners (DVA) are among the top holdings in BKLN.
In comparison, high yield bond (JNK) (HYG) funds recorded inflows of $186 million while equity (SPY) funds recorded massive outflows of $16.2 billion, respectively, last week. Equity funds had witnessed inflows of $3.9 billion in the previous week.
Returns on leveraged loans
Returns on leveraged loans rose in the week ended September 11. The S&P/LSTA U.S. Leveraged Loan 100 Index rose 0.2% from a week ago. The index is up by 0.8% year-to-date. Meanwhile, the PowerShares Senior Loan Portfolio (BKLN), which provides exposure to senior loans, ticked up by 0.04% week-over-week. However, year-to-date, the ETF has returned -0.3%.
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