August 27, 2024 - So much for the July summer slowdown.  LSTA secondary loan trading volume increased 2% to $64 billion in July.  Better still, not only were volumes 24% higher than at the same time last year, the $64 billion in activity marked an all-time for the month of July.  That said, volumes have expectedly tapered off from the record pace established during the three-month period ending May when average monthly volumes ran north of $72B.  Year-to-date, through July, secondary volume is up more than 9% over the same period last year while the number of individual loans trading on a per-month basis has increased 6% in 2024, to an average of 1,572 loans.  In comparison, the Morningstar|LSTA Leveraged Loan Index is comprised of 1,372 loans.    

While volumes remained elevated during July, price action was muted as the secondary traded mostly sideways during the month.  Even still, we witnessed the first glimpse of a risk-off mentality by traders as lower rated credits underperformed, which bucked the YTD trend.  All told, advancers outpaced decliners by a ratio of 1.7:1 in the secondary, but despite the semi-bullish ratio, the average trade price stood unchanged in a 97 context, while the median trade price was reported at 100 for the second month running.  Incredibly, the last time the median price sat at par value for consecutive months was during the record 26-month period ended October 2018.  While July trading levels remained rangebound, so did LSTA/LSEG Refinitiv Mark-to-Markets bid-ask spreads on the traded universe of loans, where the average and median spreads stood firm at 70 basis points and 50 basis points, respectively.