Leveraged loan market sees biggest single-day loss since Covid onset in 2020

The abysmal performance of the U.S. leveraged loan market was punctuated today with a daily…

The abysmal performance of the U.S. leveraged loan market was punctuated today with a daily return of negative 0.72% for the S&P/LSTA Leveraged Loan Index, the worst single-day decline for the market since March 23, 2020.

Today’s plunge punctuates a historically bad run for the asset class over the past week. All daily returns have been negative 0.25% or worse, including Monday’s negative 0.53% drubbing which — prior to today — had been the largest daily decline since March 23, 2020. The year-to-date return for the index is now negative 2.28%, down from as high as positive 0.45% through April 21.

Additionally, the average bid of the index is now 95.00, more than four points below the 2022 high of 99.08 on Jan. 23, and marking a low since November 2020. The volatility in the secondary loan market has shuttered the new-issue loan market, as no new deals were launched this week. It is the first weekly shut-out for launches since September 2020, excluding the traditionally slow holiday weeks in December.