08 Apr Voya Senior Loan Group – ‘Talking Points’ – No April Fool (includes 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.
No April Fool
The loan market moved up in the first week of April, as the index returned 0.21%, and the average bid for loans increased by 12 bps to 98.28.
Loan investors happily welcomed fresh supply in the primary market, as the combination of new LBO and corporate acquisition deals totaled $8.2 billion for the week. The secondary market also breathed some relief, as it moved away from the choppiness of recent weeks and market bids moved higher.
There were two defaults in the Index this week.
March in Review
Running out of natural market value headroom, loan price returns were unsurprisingly tempered in the last month of the quarter, resulting in a 0.08% total return. This marks a 13- month positive return streak for the Index.
Returns across the below-investment grade rating spectrum were a bit muted in March. The leaderboard by ratings cohort shifted, with CCC loan market values cooling as risk appetite (and the stock market in general) dipped in the aftermath of investor uncertainty around the Trump Administration’s agenda.
After approximately $54 billion/87 transactions (the majority of them repricing in nature) broke to the secondary market this month, the percentage of performing loans in the Index bid at par or higher slipped a bit, to 67%. This is now just below where the figure stood at the end of the year after peaking at 72% in February.