Leveraged loans post best month ever, notes Barclays Capital

Barclays Capital noted in a recent research report (US credit alpha) that the US leveraged loan market had it best month ever in terms of total returns. The bank’s leveraged loan index rose 10% in April and is up 20% year-to-date.

As the report notes, recent price rises have encouraged a tentative reopening of the primary market, with a new loan issued by Michael Foods. The $250 million term B loan priced at 450 basis points over Libor and has traded up three points – to 96 – from its launch. Another new loan is a $117.5 million first-lien bankrupty exit loan for restaurant chain Buffets, which priced at Libor + 1500bp. Pre-petition lenders will roll into a $140 million second-lien loan.