07 Jan Voya Senior Loan Group – ‘Talking Points’ – 2016 Recap and 2017 Outlook
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. Contact Breakwater Advisory for more information.
2016 Recap and 2017 Outlook
For the U.S. senior loan market, 2016’s strong total return story effectively started in March, when the price of oil rebounded and investor sentiment took a sharp upward turn from its late February lows. With little change in overall credit fundamentals, lopsided market technicals, driven by demand in excess of new loan issuance, drove loan prices back toward par. As a result, the loan market, as represented by the S&P/LSTA Leveraged Loan Index, posted an impressive full-year return of 10.16%, despite ongoing macro volatility, which included a brief Brexit hiccup. A notable divergence in returns by ratings cohort further underscored the dramatic shift in risk tolerance and yield-seeking over the past two years.