uploads///US Leveraged Loans Flows

Leveraged Loan Funds Had Small Inflows Last Week


Aug. 10 2016, Published 1:23 p.m. ET

CLO deals

According to S&P Capital IQ/LCD, no collateralized loan obligation (or CLO) deals got priced last week. It was the first week of no issuance since early April 2016. In the previous week, three CLO deals worth $1.2 billion were priced. The year-to-date CLO issuance stands at $30.8 billion.

Article continues below advertisement

Leveraged loan funds saw small inflows last week

According to data from Lipper, in the week ended August 3, 2016, leveraged loan funds saw inflows worth $60.4 million. In the previous week, leveraged loan funds had outflows of $15 million. With the inflows last week, the total net outflows from leveraged loan funds stood at $6.0 billion until August 3, 2016.

In comparison, high-yield bond funds recorded outflows of $2.5 billion, and equity funds recorded outflows of $4.4 billion last week. Equity funds saw outflows of $7.1 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 get exposure to senior loans through ETFs such as the Invesco PowerShares Senior Loan Portfolio (BKLN) and the Highland/iBoxx Senior Loan ETF (SNLN).

Leveraged loans issuance skyrocketed last week. Ultimate Fighting Championship, Avast Software, Hospital Corporation of America (HCA), and Broadcom, formerly known as Avago Technologies (AVGO), were some of the large issuers of leveraged loans last week.

Returns on leveraged loans

Returns on leveraged loans rose in the week ended August 5, 2016. The S&P/LSTA U.S. Leveraged Loan 100 Index rose 0.1%. It has risen 7.1% year-to-date.

The Oppenheimer Senior Floating Rate Fund – Class A (OOSAX), which provides exposure to senior loans, was also flat last week. Year-to-date, OOSAX has risen 3.4%. The Highland/iBoxx Senior Loan ETF (SNLN), which also provides exposure to senior loans, was also flat last week. It has risen 3.1% year-to-date.


More From Market Realist