On the blotter: March demonstrates loan market’s resilience
Based on what we are seeing on the Octaura platform, in the face of ample headwinds, the loan market proved resilient in March. The month was defined by elevated volatility, increased energy prices, private credit concerns as well as material price swings, but the loan market showed strong resilience in comparison to other asset classes. Despite sharp intramonth moves driven by geopolitical escalation in Iran and ongoing macro pressure tied to AI related uncertainty, price damage in the loan market appears‑ contained, with buyers stepping in to take advantage of loan price weakness.
Loan prices experienced multiple large price swings, and a rare stretch of ten consecutive down days, pushing prices to their lowest levels since April 2025. ‑Yet those selloffs were consistently followed by fast rebounds — leaving many weeks only modestly lower on a net basis.
That stability stands in contrast to broader risk assets. Since March 1, the S&P 500 was down 5.45%, while global bond markets were down ~3.1% MTD as of Mar 20th, over the same period, oil prices were up 39%,1 reinforcing inflation and policy uncertainty. Against that backdrop for the first 20 days of March, loans stayed effectively unchanged for the month, according to the approximately 1,200 loans having an Octaura Liquidity Score between 4 and 10+ ( “Octaura Broad Tracker”) down just 6c.
Against this volatile backdrop, Octaura platform engagement accelerated. The platform recorded multiple record weeks, with average weekly inquiry exceeding $3bn through the month. $7.7bn traded on Octaura in March across more than 1.3K unique credits, beating the previous record trade volume in January by 11%. Activity breadth expanded even during sell‑offs, reinforcing the platform’s role as a venue for liquidity during periods of stress.
Liquidity as differentiator this month
Dispersion across OLS (Octaura Liquidity Score) buckets was pronounced. The most liquid cohorts — OLS 9, 10, and 10+ — frequently outperformed or traded through mids, while OLS 4–6 consistently underperformed, even on days when the broader market was flat or higher.
As of month end, loans scored 10+ by OLS showed +6c on the month while loans scored 4 by OLS showed down $1.1 on the month. Bid–offer spreads widened meaningfully from year-to-date‑ tights, particularly in illiquid risk, while spreads in highly liquid names remained comparatively stable.
Through the majority of the month, the Highly Liquid Tracker (the 100 most liquid loans on Octaura) outperformed on platform, even as broader loan prices chopped sideways. However, towards the back half of the month we began to see weaker performance compared to the Octaura Broad Tracker; with our Highly Liquid Tracker finishing the week of Mar 20th .16c weaker at $98.63, while our Broad Tracker declined .11c to $95.98.
The Highly Liquid bucket started the month at $98.06, reached a peak of $99.27 on March 10th, but finished the month down 5c at $98.01. The Broad Tracker finished 3c higher at $95.82 after starting the month at $95.79, underscoring that the group of Highly Liquid loans on Octaura swung much more in price through the landscape of the month as stress worked its way through the markets.
The month ended with 39% of loans bidding above par, signaling buyers are continuing to be more price sensitive during volatility and risk appetite is selective.
Sector performance remains idiosyncratic
Sector leadership rotated frequently and often independently of the broader tape. IT and Tech continued to underperform but had stronger rebounds from February lows. Sector performance this month pointed to capital potentially rotating away from software loans and into other industries, with Media & Comms, Healthcare, Consumer Staples, and select Energy names showing relative strength over the month. The dispersion reinforced that stock selection and sector positioning mattered.
Credit backdrop and look ahead
The U.S. syndicated loan market remained active through the week ending Mar 27th, with over $12bn in new volume, though some large deals were delayed amid AI concerns and market uncertainty.1 Loan new issue activity is beginning to pick up, particularly new‑ money LBO financings, including the largest LBO in more than a decade currently in market (EA Sports2), further highlighting the appetite in the primary market is very strong. Last week alone saw more new issuance launched than the prior three weeks combined, a potential near term‑ headwind for prices. Should tensions ease in the Middle East, oil prices fall, and the Fed cuts rates, we are predicting conditions could align for a broader market rally.
1. https://blinks.bloomberg.com/news/stories/TCBTZPKK3NY8
2. FinancialContent – The $55 Billion Final Boss: Electronic Arts and the Dawn of the Mega-LBO Era