uploads///US Leveraged Loans Flows

Leveraged Loan Funds Continue to Witness Outflows


Dec. 4 2020, Updated 10:52 a.m. ET

CLO deals

According to S&P Capital IQ/LCD, five CLO (collateralized loan obligation) deals worth $2.3 billion got priced last week. Meanwhile, four CLO deals worth $1.7 billion got priced in the previous week. The CLO issuance stands at $12.3 billion YTD (year-to-date).

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Leveraged loan funds saw outflows last week

According to data from Lipper, leveraged loan funds saw the fifth consecutive week of outflows last week. The quantum of outflows was small and came in at $75 million last week. In the previous week, leveraged loan funds saw outflows of $93 million. With the outflows last week, the total net outflows from leveraged loan funds stood at $5.2 billion as of April 27, 2016.

In comparison, high-yield bond funds recorded inflows of $296 million. Equity funds recorded inflows of $101 million last week. Equity funds witnessed outflows of $4.5 billion in the previous week.

Senior loans are tracked by mutual funds such as the Oppenheimer Senior Floating Rate Fund – Class A (OOSAX) and the Fidelity Advisor Floating Rate High Income Fund – Class A (FFRAX). Investors can also take exposure in senior loans through ETFs such as the Invesco PowerShares Senior Loan Portfolio (BKLN) and the Highland/iBoxx Senior Loan ETF (SNLN).

Leverage loans issuance was stable last week. NBTY (NTY), American Airlines (AA), PQ Corporation, and NuSil Technologies were some of the leveraged loan issuers last week.

In the previous week, Prime Security Services LLC—a subsidiary of Apollo Global Management (APO), MKS Instruments (MKSI), Precyse Solutions LLC, and Netsmart Technologies issued leveraged loans.

Returns on leveraged loans

Returns on leveraged loans rose in the week ending April 29. The S&P/LSTA U.S. Leveraged Loan 100 Index rose 0.4% from a week ago. The index is up by 4.9% YTD. Meanwhile, the Oppenheimer Senior Floating Rate Fund – Class A (OOSAX) provides exposure to senior loans. It rose 0.1% week-over-week. OOSAX has risen 2.9% YTD. The Highland/iBoxx Senior Loan ETF (SNLN) also provides exposure to senior loans. It was flat week-over-week. It has risen 4.2% YTD.

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


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