After plummeting in March, activity has picked up in the institutional market. However, issuers are facing higher yields on average so far this quarter. After a huge jump in 3Q22, average yields were relatively flat in the last two quarters, as higher base rates were compensated by tighter spreads and OIDs. This quarter, however, every single component of yield has widened. In turn, the average primary yield, assuming a 3-year term to repayment, for first-lien institutional term loan Bs is 10.26% in 2Q23, up from 9.54% in 1Q23.
(Past performance is no guarantee of future results.)
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Private Credit Defaults 101: Back to School
As Labor Day approaches, the unofficial end of summer is upon us. But, before we get too sad, there is also the familiar back-to-school energy.