Debtwire Middle-Market – 9/5/2022

Loan and bond investors trade
short-term pain for long term-gain


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Source: Debtwire Par, Markit, ICE BofA US HY Index

Following a short-lived summer rally in the leveraged loan and high yield bond secondary markets, prices have once again been on the downswing. Leading up to fiery comments from Fed Chairman Jerome Powell at the Jackson Hole Economic Symposium on 26 August, and continuing into early September, loan and bond prices began to slip from recent highs, with loan bids declining to 93.12 from a 12 August high of 94.21, while secondary pricing on high yield bonds fell to 87.37 from 91.56 during the same time. While both figures remain above recent lows set in early July, the slide back down in pricing will prolong the pain for debt investors and issuers alike.