US leveraged loans ended 2025 with an above-average return, underpinned by resilient interest income despite secondary market weakness and a waning floating-rate advantage. Technicals remained broadly supportive, as record CLO formation offset persistent retail outflows, though performance diverged sharply by sector and credit quality, with lower-rated borrowers bearing the brunt of market declines. Despite elevated volatility, the leveraged loan asset class continued to expand, with outstandings reaching a record $1.55 trillion by year-end.  Marina Lukatsky of Pitchbook LCD wrote this.