Leveraged loans occupy a unique position in the credit asset class. Like high-yield bonds they boast an active secondary market, but unlike junk they reside at the top of the capital structure.

Also, like high-yield, these loans are extended to non-investment grade issuers so enjoy higher returns than their investment grade cousins. But unlike bonds, they are secured by the assets of the borrower.

These features make the loan asset class particularly favored by experienced investors during times of volatility, as we currently are enjoying. Over the course of three decades, institutional buyers of loans have stepped up when other markets have closed.

As we discussed last week, despite dramatic public equity swings witnessed over the past month, the loan market has generally brushed off Fed rate confusion and China growth rate consternation. Loan prices for broadly syndicated deals have generally stayed within a band very close to par – in the 98-99 range.