Leveraged Loan Insight & Analysis – 2/6/2023

Returns jump across US corporate credit to start the year


Total returns on US corporate credit have jumped to start the year, driven by more favorable sentiment across the capital markets, as investors react to a third straight month of declining inflation and the expectation that the Federal Reserve is closer to completing rate hikes. The risk-on environment was led by US equities, with the S&P 500 7.2% higher as of Wednesday, February 8, followed by US HY bonds at 4.2%, US IG bonds at 3.3% and US leveraged loans at 3.3%.