While leveraged loan issuance is down year-over-year and demand for paper is very strong, buysiders say they can still be selective in their investments, given the loan market as a whole is still growing in terms of outstanding debt. On top of this, they note the secondary market can be a good option for them to pick up loans despite the technical environment, “we can still buy assets in the secondary market that were issued last year or the year before and some of these names were issued with an EBITDA number that was inflated, so you can pick these up at 95, 96, 97, so we are not being forced into the market even though we are seeing inflows,” according to one buysider.
That said, a large chunk of the secondary market is highly priced. A backdrop of strong market technicals has pushed the secondary loan market to loftier levels in recent weeks. The share of institutional loans bid in the par-plus area has climbed to over 50%. At the same time, the average bid has climbed to 98.53.
Colm Doherty is Debtwire’s Global Head of Primary Market Analysis. He is responsible for leading the production of primary market analysis and reports focused on the leveraged loan and high yield bond markets. Prior to joining Debtwire, Colm was Director of Analysis at Thomson Reuters LPC covering leveraged loans, CLOs and high yield bonds.
Colm has a B.A. in Economics & Legal Science from National University of Ireland Galway and an MSc. in Accounting & Finance from Ulster University.
Colm Doherty is Debtwire’s Global Head of Primary Market Analysis. He is responsible for leading the production of primary market analysis and reports focused on the leveraged loan and high yield bond markets. Prior to joining Debtwire, Colm was Director of Analysis at Thomson Reuters LPC covering leveraged loans, CLOs and high yield bonds.
Colm has a B.A. in Economics & Legal Science from National University of Ireland Galway and an MSc. in Accounting & Finance from Ulster University.
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