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Weekly Market Summary
Jun 30 to Jul 4, 2025
Extra Credit*
- Investment-grade spreads now trade 7 basis points (bps) inside of the pre-“Liberation Day” levels. The rapid spread retracement has demonstrated the continued resiliency of credit markets given the strong technical backdrop of high all-in yields, low net issuance, and positive economic growth.
- Yields for investment-grade corporate bonds remain attractive and continue to entice buyers. Investment-grade corporate bond yields are trading in the 64th percentile of their range since 2000, meaningfully higher than high-yield, which is trading in the 42nd percentile. Net supply after coupons has been low, and that trend is set to continue throughout the summer. In April through June, net supply after coupons was, in aggregate, roughly $40 billion, creating a strong positive technical for the secondary market. In July and August, roughly $140 billion in maturities and an additional $60 billion in coupons are expected. For context, the median new issuance for these months has been $170 billion since 2015.
- The lack of long-end supply has flattened curves substantially. Year-to-date 10-plus-year supply as a percent of total new issuance is the lowest in over a decade at just 13%. The lack of long-end supply has made investors hunt for yield even more difficult and, in turn, driven major flattening in 10s30s curves.
As of 6/27/25.
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.
Any discussion of individual companies is not intended as recommendation to buy, hold or sell securities issued by those companies. Aristotle Fund holdings can be found on the fund pages linked above.
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