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Weekly Market Summary

Jul 17 to Jul 21, 2023

View Current Performance

Extra Credit*

  • High-yield bond issuance of $94.4 billion so far this year (as of 7/14/23) remains ahead of the $68.3 billion priced for the same period in 2022, though those two totals were, by far, the lowest for any comparable period since the Global Financial Crisis ($72.7 billion for the corresponding span in 2009, and $47.2 billion in 2008). For further context, comparable year-to-date totals were $292 billion in 2021 and $221 billion in 2020, both well ahead of the cumulative $197 billion of total issuance over the 18-plus months since the start of 2022.
  • Year-to-date net flows for high-yield bond ETFs and mutual funds stand at -$9.86 billion (outflows of $5.7 billion from ETFs and $4.16 billion from mutual funds as of July 14, 2023). Outflows were much heavier over the same year-to-date span last year when investors pulled $34.5 billion from the asset class ($15.66 billion from ETFs and $18.86 billion from mutual funds). Nevertheless, 2023 is tracking toward a third straight annual net outflow, following on full-year net outflows of $29.7 billion last year and $4 billion in 2021.
  • After cooling in May, leveraged loan amend-and-extend volume heated up in June, courtesy of 17 transactions, resulting in $13.1 billion of facilities extended. Moreover, with a half-year still to go, year-to-date volume at $88.3 billion is only about $20 billion away from topping the high-water annual marks of 2019, 2021 and 2022. This year has already surpassed the annual total in 2020 and the totals of years spanning 2014-2018. 
  • The trailing 12-month default rates for bank loans and high-yield bonds, excluding distressed exchanges, finished the month at 2.41% and 1.64%, respectively, up from 2.41% and 1.49% from May. The long-term historical default rate for loans and high-yield bonds is 3.1% and 3.2%, respectively.

Sources: Bloomberg and JP Morgan as of 7/17/23.

Yield as of:
July 21, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
Prior Week
Start of the Year
Option Adjusted Spread as of:
July 21, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
376 bps
534 bps
113 bps
Prior Week
379 bps
531 bps
115 bps
Start of the Year
469 bps
592 bps
121 bps
Prices as of:
July 21, 2023
High-Yield Bonds
Investment-Grade Corporates
Last Week
Prior Week
Start of the Year

*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.

Investors should consider a fund’s investment goal, risks, charges, and expenses carefully before investing. The prospectus and/or the applicable summary prospectus contain this and other information about the Fund and are available from AristotleFunds.com. The prospectus and/or summary prospectus should be read carefully before investing.

Investing involves risk. Principal loss is possible.

Foreside Financial Services, LLC, distributor.

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