uploads///US Leveraged Loans Flows

Leveraged Loan Funds Saw Back-To-Back Inflows


Jul. 29 2016, Updated 8:40 a.m. ET

CLO deals

According to S&P Capital IQ/LCD, three CLO (collateralized loan obligation) deals worth $1.32 billion were priced last week. In the previous week, three CLO deals worth $1.9 billion were priced. The YTD (year-to-date) CLO issuance stands at $30.7 billion.

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Leveraged loan funds saw small outflows last week

According to data from Lipper, leveraged loan funds saw back-to-back inflows, but the quantum of inflows was smaller than the previous week. Inflows worth $69 million came into leveraged loan funds during the week ending July 20. In the previous week, leveraged loan funds saw an inflow of $136.5 million. Even with the inflows last week, the total net outflows from leveraged loan funds stood at $6.0 billion until July 20, 2016.

In comparison, high-yield bond funds recorded inflows of $322 million, while equity funds recorded outflows of $7.1 billion last week. Equity funds witnessed outflows of $7.5 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).

Leveraged loan issuance jumped last week. Revlon (REV), Reynolds Group, WireCo WorldGroup, and Waste Industries were some of the large issuers of leveraged loans last week.

Returns on leveraged loans

Returns on leveraged loans rose in the week ending July 22. The S&P/LSTA U.S. Leveraged Loan 100 Index rose 0.4%. The index is up by 7.1% YTD. Meanwhile, the Oppenheimer Senior Floating Rate Fund – Class A (OOSAX) provides exposure to senior loans. It rose 0.3% week-over-week. OOSAX has risen 3.4% YTD. The Highland/iBoxx Senior Loan ETF (SNLN) also provides exposure to senior loans. It rose by 0.4% last week. It’s up by 3.1% YTD.


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