.jpg)
Weekly Market Summary
Sep 29 to Oct 3, 2025
Extra Credit*
- If all historical levels are testes, investment grade spreads may tighten another 10 basis points. Spreads are at their tightest level since 1998, but when accounting for constituent differences, spreads were about 5 basis points tighter in 2021. High-yield spreads are still around 90 basis points wide of composition-adjusted all-time tights. Significant compositional changes have occurred in the high-yield index since the all-time tights recorded in 2007.
- The index is weighted toward shorter maturities, with 54% of debt maturing within 7.5 years and only 11% in the 25-year-plus bucket. At the very front-end, both single-A and BBB securities have 15-20 basis points of room before reaching their historical tights. At 5 years, there’s about 10 basis points left while 10 years have 10-15 basis points. In the 25 year and above segment, spreads across ratings have only marginally moved from recently reached all-time tights. This suggests that the marginal push tighter will likely be driven by shorter duration.
- The US leveraged loan market rebounded sharply from the tariff-driven slump earlier in the year. Primary activity surged to $385 billion in Q3 2025, making it not only the busiest quarter of the year, but also the third-highest quarterly volume on record. This marked a dramatic recovery from the $115.5 billion in Q2 2025, when heightened macroeconomic uncertainty temporarily weighed on new issuance
As of 10/2/25.
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.
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.