Secondary market unchanged to slightly stronger in quiet Friday session

By Sara Rosenberg

New York, March 31 – The secondary bank-loan market on Friday was unchanged to higher with some better buying taking place, although in muted activity, according to market sources.

One source placed the market unchanged to up about an eighth, while a second source said it was unchanged to maybe up a quarter on the day.

Fund flows

In other news, actively managed loan fund flows on Thursday were negative $64 million and loan ETFs were positive $60 million, market sources said.

Loan funds reported weekly outflows totaling $712 million, including negative $60 million ETFs, which compares to outflows of $1.74 billion and $1.58 billion in the prior two weeks.

Leveraged loan funds have reported 31 outflows in the last 32 weeks with actively managed funds experiencing a 47th consecutive weekly withdrawal, sources continued.

Dedicated loan fund AUM is down to $96 billion from $142 billion in May 2022.

Year to date outflows for loan funds total $9.3 billion, versus outflows of $12.8 billion in 2022, sources added.

Loan indices rise

IHS Markit’s iBoxx loan indices were higher on Thursday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.22% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.29%.

Month to date, the MiLLi is down 0.28% and year to date it is up 2.91%, and the LLLi is up 0.17% month to date and up 3.1% year to date.

Average secondary market bids in the U.S. on Thursday were 91.32, up 0.08% from the previous day and down 0.61% year to date.

According to the IHS Markit data, some of the top advancers on Thursday were Equinox Fitness Clubs’ November 2017 term loan B1 at 90.54, up from 87.58, CenturyLink/Lumen’s January 2020 covenant-lite term loan B at 65.9, up from 64.21, and Klockner Pentaplast’s February 2021 covenant-lite term loan 1 at 91.75, up from 89.75.

Some top decliners on Thursday were Team Health’s January 2017 covenant-lite term loan at 84.5, down from 88.71, Shutterfly’s July 2021 covenant-lite term loan at 48.83, down from 50.8, and Instant Brands’ April 2021 covenant-lite term loan at 37.08, down from 38.42.

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