U.S. leveraged finance issuance totaled a record $1.08 trillion in 2021, including $465 billion in high yield loans and $615 billion in U.S. institutional loans, according a report to be published Friday by KKR Credit, a unit of KKR & Co. Inc. . While most of the eight sub-sets of the credit market turned in positive total returns for 2021, only two of the eight were positive in January: European bank loans (up 0.35% in total return) and U.S. bank loans (up 0.36%). Asia high yield credit had the worst January results with a negative 4.81% return. Overall, CCC-rated bonds have held up well in the face of volatility, KKR said. “In January, while broader credit markets started to weaken under pressure, CCCs, the perceived riskiest part of the market, weathered the storm best,” KKR said. CCC-rated bonds outperformed equities in January, KKR said. “We have already started to see the market shift in an unambiguous fashion towards credit and we believe the time for increased credit exposure is now,” the firm said.
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