On the Blotter: August prices recover to near pre-tech selloff levels
Loan prices have recovered to levels comparable to those observed before the AI-driven sell-off. Based on market activity we have observed on Octaura, inquiry appears to be moving across a wider range of credits. The broader market backdrop supports that read: the Bloomberg U.S. Leveraged Loan Index returned 0.79% in July, was up another 0.35% through Aug. 11, and had an average price of 95.42 as of Aug. 11.1
As of Aug. 18, Octaura’s Broad tracker gained 5c to $97.27, a level last seen in January. The Info Tech. & Software sector moved to $93.44, a level last seen in early February, suggesting that the recovery may be reaching the part of the market most closely associated with earlier AI-driven pressure.
LSTA/Morningstar also noted that July’s loan recovery was led by software and insurance, while cautioning that stress persisted and the software gap remained.2 Activity observed on the Octaura platform also indicated sector breadth into mid-month, with the Aug. 17 weekly snapshot showing IT & Software up 28c.
Client activity on Octaura supported that trend. Across August, Octaura saw platform inquiry across 1409 reported credits. Participation also held up throughout the month: an Aug. 10 snapshot included 34 accounts, the strongest participation datapoint during the period, while an Aug. 17 snapshot included 865 credits and 24 accounts, underscoring continued breadth later in the month.
The month saw relatively balanced activity, with a 48/52 buy/sell split. Execution quality also extended beyond the most liquid names: on Aug. 6, names scored by Octaura Liquidity Score (OLS) 3–5 selling produced 20.8c of average price improvement, with execution just 10c from mids and about 11c better than screen levels. As of month end, execution for OLS 3-5 names showed 36c to mid, about 14.5c better than the best level on screen, versus OLS 10 names, which showed 7c to mid, and 6c better than the best levels on screen. Together, these figures suggest that improving market conditions may be reflected not only in prices, but also in buying behavior, participation, and observed execution quality on Octaura.
Inquiry appeared to move further down the liquidity spectrum as the month went on. During the prior trading day as of Aug. 18, OLS 4–7 represented 33% of inquiry, compared with 27% over the last month. At the same time, OLS 10+ names represented 11% of inquiry, down from 15% over the past month. That shift may suggest clients are looking beyond the most liquid names as the market stabilizes.
This comes amidst a market backdrop where sovereign borrowing needs remain elevated, while AI-related infrastructure spending has contributed to a meaningful increase in investment-grade issuance. Despite that growing supply, spreads across both IG and leveraged credit remain near historically tight levels.4 The market in August has seen lots of repricings, and new issuance continues to grow. Based on a LevFin 2Q update from Fitch as of July 31st, leveraged loan new issuance held steady at ~$220BN more than double a year earlier. As a result of the 2028 maturity wall, we are still seeing a significant amount of repricing and amend-and-extend activity, as this rose to 75% of the volume5.
With prices back near January levels, buyer engagement increasing, and inquiry broadening beyond the most liquid names, August looked less like a summer slowdown and more like a recovery taking hold.
Citations
- The Lead / Bloomberg Leveraged Lending Insights — https://theleadleft.com/bloomberg-leveraged-lending-insights-8-10-2026/
- 2. LSTA / Morningstar Leveraged Loan Index Analysis, July 2026 — https://www.lsta.org/content/morningstar-lsta-leveraged-loan-index-analysis-july-2026/
- Morningstar Leveraged Loan Index Monitor, Q2 2026 — https://indexes.morningstar.com/insights/markets-review/blt3e90b9b34550a6e0/morningstar-leveraged-loan-index-monitor-q2-2026
- Hyperscaler debt binge pushes yields up as investor demand cools | Reuters
- U.S. LevFin Markets Steady in 2Q26; Credit Quality Divide Widens
—
All market prices, data and other information (including that which may be derived from third party sources believed to be reliable) are provided “AS-IS” and are not represented or warranted, expressed or implied, as to completeness, accuracy, or fitness for a particular purpose and are subject to change without notice. Octaura disclaims any responsibility or liability to the fullest extent permitted by applicable law, whether in contract, tort (including, without limitation, negligence), equity or otherwise, for any loss or damage arising from any reliance on or the use of this material in any way. The information contained herein is as of the date and time referenced only, and Octaura does not undertake any obligation to update such information.
Methodology Note: Unless otherwise indicated, references to trackers, liquidity buckets, flow data and execution metrics are based, in part, on Octaura internal data and proprietary classifications for the periods specified. Such data is limited to the instruments, counterparties and activity captured on the platform and may not be representative of the overall leveraged loan market. References to specific issuers or transactions are provided solely as illustrative examples of market activity and do not constitute recommendations or endorsements.
This material is intended solely for Qualified Institutions and is not intended for individual investors or retail customers. It is intended only for recipients that are capable of evaluating the information presented and bearing the economic risks of any investment discussed. It is not intended for distribution to, or use by, any person or entity in any jurisdiction where such distribution or use would be contrary to applicable law or regulation.
This material reflects the views of the author as of the date hereof and is provided for informational purposes only. It does not constitute research, a recommendation, investment advice, legal advice, or an offer or solicitation to buy or sell any security, financial instrument, or service. Statements of opinion are subject to change without notice and are not guarantees of future performance or market conditions. Recipients should make their own independent evaluation and should not rely on this material as the basis for any investment, legal, compliance or business decision.