Leveraged credit rises in April | Leveraged credit yields tighten, loans trade tight to high yield

Markets broadly rallied in April on the back of unprecedented stimulus by Congress and the Federal Reserve. HY Bonds posted their strongest monthly performance since January 2019 while Senior Secured Loans recorded their largest one-month gain since 2009. A decline in interest rates following an early-month spike boosted the duration-sensitive Barclays Agg.

The duration-sensitive Barclays Agg was negative in August as long-term interest rates rose slightly.

Credit markets were mixed last month. High yield built on its July rally in the first half of the month before surrendering those gains, ending August down -2.83%. Floating rate senior secured loans ended August up 1.54%.

Credit markets saw another month of positive returns in August as high yield bonds returned 0.29% while senior secured loans returned 1.17%.

High-duration fixed income, such as the Barclays Agg, performed well in August due to falling 10-year U.S. Treasury yields. Strong corporate earnings and U.S. economic data provided tailwinds for HY Bonds and Senior Secured Loans.

Leveraged credit mixed in August | High-rated credit outperforms

Credit markets climbed steadily higher throughout a relatively quiet August, with HY Bonds and Senior Secured Loans returning 0.98% and 1.49%, respectively. Interest rates rose throughout the month following the Fed’s inflation policy shift, sending the duration-sensitive Barclays Agg down -0.81%.

Vaccine-fueled optimism drove credit markets steadily higher throughout December.

Credit markets were positive in December. After two straight monthly declines, HY bonds posted their best month of the year, up 1.88%, while loans returned 0.64%.