Leveraged loan issuance jumped in February despite continued pull back in the asset class from retail loan funds, ongoing negative press coverage and questions around further Fed rate hikes in 2019, according to the latest data from Thomson Reuters LPC. There was $61.2 billion of leverage loan volume, broken out between $31 billion of pro rata leveraged issuance and $30.2 billion of institutional leveraged issuance. This is a 50% increase from January volume. Leveraged loan issuance was $114.4 billion in Feb 2018.

In the secondary market, leveraged loan returns declined 96bp in February month over month, posting a return of 1.59%, according to the SP/LSTA Lev Loan Index, as secondary prices rebounded less dramatically when compared to January. Open-ended loan funds returned on average 1.47% in February, down 83bp from 2.3% in January.

Five issuers defaulted on their institutional leveraged loan debt in February 2019, with Windstream Services logging $1.749 billion of defaulted debt in its Chapter 11 filing - the first telecom sector default since Avaya defaulted on $3.247 billion of debt when it filed for bankruptcy in Jan 2017. 

CLO activity picked up in February from a sluggish January, issuing $13.2 billion of new issue volume, up from $5.1 billion in the prior month, according to the analysts.  Refinancing and reset activity was low in February as spreads continued to widen from the start of the year.