uploads///US Leveraged Loans Flows

Leveraged Loan Funds Saw Outflows in the First Week of 2016


Nov. 20 2020, Updated 12:55 p.m. ET

CLO deals froze for the second consecutive week

No CLO (collateralized loan obligation) deals were priced last week. As a result, year-to-date, CLO issuance stands at zero according to S&P Capital IQ’s LCD[1. Leveraged Commentary and Data]. LCD added that, in 2015, CLO deals worth $92.1 billion were struck through 176 deals.

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Leveraged loan funds saw outflows

According to data from Lipper, leveraged loan funds saw an outflow in the seven days ended January 6, 2016. The quantum of outflows was $560.0 million last week, a fall from the $754.8 million seen in the previous week. With the outflows last week, the total net outflows from leveraged loan funds stood at $560.0 million year-to-date.

Senior loans are tracked by the mutual funds like the Oppenheimer Senior Floating Rate Fund (OOSAX) and the Fidelity Advisor Floating Rate High Income Fund (FFRAX).

Loans of Avaya (AV), Par Pharmaceuticals Companies (PRX), and Neiman Marcus are among the holdings in the OOSAX fund. Meanwhile, loans of Hilton Worldwide Holdings (HLT), Albertson Company (ABS), and Dell are among the holdings in the FFRAX fund.

In comparison, high yield bond funds recorded outflows of $809.0 million while equity funds recorded outflows of $12.0 billion, respectively, last week. Equity funds had witnessed inflows of $10.0 billion in the previous week.

The primary market saw no issuance of the leveraged loans last week. However, in December 2015, Microsemi (MSCC), Konecranes Terex Plc, formed from the merger of Konecranes Plc and Terex Corporation (TEX), and ClubCorp Club Operations, Inc, a subsidiary of ClubCorp Holdings (MYCC), were some of the issuers of leveraged loans.

Returns on leveraged loans

Returns on leveraged loans rose in the week ended January 8. The S&P/LSTA U.S. Leveraged Loan 100 Index fell 0.2% from a week before. The index fell year-over-year by 2.8%. Meanwhile, the Fidelity Advisor Floating Rate High Income Fund(FFRAX) that provides exposure to senior loans fell 0.07% week-over-week. Year-over-year, the FFRAX has returned -5.1%.

For more analysis of mutual funds, please visit Market Realist’s Mutual Funds page.


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