September 22, 2021 - by Ted Basta. As traders “bought the dip” in August (and into September for that matter), LSTA secondary loan trading volume declined 5% to a nine-month low of $59B. This isn’t surprising given the seasonality of trade activity we witness each year (volumes tend to drop in the summer months). But even so, the secondary’s monthly turnover ratio (trading divided by outstandings) during July and August averaged 4.6%, less than one percentage point below the LTM monthly ratio of 5.2%. Furthermore, trade volume increased a noteworthy 24% this summer when compared to the same two-month period last year. (noting that S&P/LSTA Leveraged Loan Index (LLI) outstandings are 6.4% higher today than they were last August). Annualized trading volumes total $799B this year, a 3% increase over last year’s record $770B. That said, this 3% gain is tracking below the 6% increase in LLI outstandings this year.
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