September 1 - September 30, 2020
- In September, leveraged loans produced a gain and outperformed high yield bonds, which experienced a loss for the first time since March.
- CCC-rated bonds and loans generated positive performance and outperformed their higher rated peers.
- We conduct a deeper dive into spread changes in the CCC-rated segment of the high yield market.
In general, various indicators continue to show improvement in overall economic activity as the U.S. economy resumes its reopening. Unfortunately, such renewal in activity has coincided with a surge in COVID-19 cases. However, and thankfully, the most recent surge or “second wave” in the U.S., and abroad, has yet to result in an alarming increase in hospitalizations or mortality rates. That said, the recent announcement that President Trump has tested positive for COVID-19 will create further uncertainty and likely inject volatility into the markets.