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Weekly Market Summary
Jan 5 to Jan 9, 2026
Extra Credit*
- US leveraged loans delivered an above-average 5.90% return in 2025, supported by strong interest income of 7.90% that helped offset softness in secondary market. However, the combination of declining base rates and spread compression weakened the floating‑rate benefit of leveraged loans, causing them to lag equities, high‑yield, and investment‑grade bonds for the first time since 2020.
- Quality was the primary driver of returns across the credit spectrum, with double‑B‑rated loans outperforming both single‑B and triple‑C segments on a full‑year basis for the first time since 2022. Representing approximately 23% of the market, double‑B loans led with a 6.26% gain. Single‑B loans, the largest cohort at 62% of the index, followed closely with a 6.18% return, while triple‑C loans significantly lagged, posting just 1.81% in 2025.
- Growth and performance held up despite challenging conditions, as the leveraged loan market expanded 9.2% to a record $1.55 trillion by year‑end 2025. Returns strengthened into December, when the index gained 0.64%, its best monthly result in five months. Over the year, loans delivered an average monthly return of 48 basis points, supported by improving secondary prices, with the market‑value component contributing positively for the first time since July.
Pitchbook as of 1/7/2026
Previous reports
*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Credit Suisse Leverage Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.
Past performance does not guarantee future results. Index performance is not indicative of fund performance. Indexes are unmanaged and it is not possible to invest directly in an index.
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