Institutional loan issuance shrinks
as issuers ride out higher pricing environment
Source: BofA US HY Index, Debtwire Par
In the face of a host of macroeconomic headwinds, not limited to persistently high levels of inflation, rising interest rates, an ongoing war in Ukraine and supply-chain issues, and notwithstanding the emergence of the world economy from a two-year global pandemic, investors are demanding increased compensation to keep the loan market open for business. So far in May, average margins on first-lien institutional loans have soared to 454 basis points (bps), a fresh post-pandemic high from 432bps seen in March.