After falling sharply in late 2018, secondary market term loan prices have rallied in the first two months of 2019. However, unlike in most prior downturns, higher rated credits were hit harder when prices fell, and these same credits are the ones that have rebounded the most year-to-date.
In 4Q18, it was a technically driven market decline as retail loan fund portfolio managers were selling assets to meet a surge in redemptions, causing higher rated, more liquid names to suffer large declines. BB and B rated loans dropped by 452bps and 474bps, respectively, while CCC rated loans were off only 373bps on average.
But the decline in higher rated loans proved to be short-lived; BB credits led the recent rebound with a 340bps jump year-to-date, compared to a 272bps gain for B credits and an 81bps drop for CCCs.
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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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