09 Apr Voya Senior Loan Group – ‘Talking Points’ Weekly Update (incl. March in Review)
Voya Senior Loan ‘Talking Points’ is a weekly publication from the Voya Senior Loan Team Heads, which provides key insights and results in the Senior Loan marketplace.
Hitting a Higher Note
Well-rated and highly regarded new issue made the headlines last week as the bumpy first quarter ended on a better note relative to where it started. The index was up 0.25% on the week, with average bids moving to 91.67, a 16 bps increase over the week prior.
New issue bids strengthened noticeably, as a coterie of deals that included established issuers with higher ratings made their way into the market.
The secondary market also found itself generally well-bid, despite sizeable allocations and an active primary market. Cash inflows from several notable M&A-related repayments that closed at the start of the second quarter lent their support to this bidding strength.
March in Review
After the volatile first two months of 2016, March stayed true to the old adage of coming in like a lion and out like a lamb. The Index posted its biggest one-month gain since October 2011, a 2.76% increase. These gains were strong enough to offset January and February losses, pushing the Index into the black for 2016, at 1.55%. Larger, more actively traded loans experienced an even greater positive move, with the largest 100 issuers boasting a 3.15% gain on the month, or a robust 2.49% for the quarter.
From an industry perspective, the relatively small but bloodied Energy and Metals & Mining sectors both made notable gains for the month, up 11.01% and 7.65% on the month, respectively. Whether a sector-specific bear market rally, or wounded cat bounce, only time will tell.
Loan mutual funds experienced their first inflows since July 2015 institutions continue to strategically allocate to the loan asset class, also providing a level of bid side support to the market.