Duration is everything in a rising interest rate environment. Senior loans, as tracked by the S&P/LSTA U.S. Leveraged Loan 100 Index are down 0.34% month to date. These floating rate below investment grade loans have seen their weighted average yield rise by 19bps since May month end. Meanwhile, fixed rate high yield bonds tracked in the S&P U.S. Issued High Yield Corporate Bond Index, which have a longer duration than floating rate debt, have seen a negative 1.51% return in June so far. Bonds in that index have seen a rise in yields of about 61bps since May.
Learn more about the characteristics of the loan market and the indices that track it as we host a webinar entitled ‘The State of the Bank Loan Market’ on June 20th.
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