US leveraged loans rebounded sharply in April, with the Morningstar LSTA US Leveraged Loan Index posting a 1.29% return, its strongest month in nearly a year, and turning YTD performance positive for the first time since Jan. 28. Beneath the surface, however, bifurcation deepened as investors grew increasingly selective within Software, where AI disruption risk remains top of mind. These concerns, alongside tariff uncertainty and a challenging macroeconomic backdrop, kept borrowers largely on the sidelines, holding issuance well below recent historical averages. Marina Lukatsky of Pitchbook LCD wrote this.