On the Blotter: The loan market grinded its way back up in April, as buying comes back to the platform
Repricings, new deals, and market moves that we saw this month.
Amidst all of the macro (tariffs, Fed, Iran) as well as credit specific (private credit, AI, software) themes permeating the market, this week kicked off the second week of earnings, with now a majority of companies reporting. April brought large day-over-day swings as investor sentiment healed at a cautious pace, leading participants to be in a wait-and-see mode. Prices in recently impacted sectors like tech earlier this year have slowly started to show rebounds in prices. We saw the market grind higher in the last 2 weeks of April, as buying accelerated on the platform a few times throughout the month.
Another indicator of increasing strength was the breadth of accounts buying and the total number of OWICs, 120, on the month. As of April 30th, the Octaura universe of loans saw 52% bidding above par – up from 36% in the beginning of the month, showcasing increased demand.
On the platform, we saw mixed flows, while buying peaked on Apr 28th, at 81% of trade count.
The increase in demand has also been favored towards more liquid loans, likely a result of market sentiment still wary on AI/tech sector risk and Middle East tensions that escalated last month.
The difference in bid price between the most liquid loans on Octaura* versus moderately liquid loans** hit an all-time high for the year last week. The difference in bid price between these two groups of loans peaked at ~$4 as we rounded the last week in April, the highest it has been all year. In this environment, liquidity classification has become a large price differentiator.
Big picture & major market events this month
In the first week of April, the take-private deal of Sealed Air, priced a $3.5bn seven year-term loan B. Despite generating over $4.3bn in demand on the dollar loan1, the deal was deliberately sized below orders to support secondary trading. These larger LBO deals showcase credit risk appetite improving as banks think they can syndicate risk, further indicating strong loan demand. Elsewhere, TDR Capital‑backed EG America (Cumberland Farms) priced a USD 550mm fungible add‑on TLB at S+325 on April 7.
However, so far this year, we’ve seen significant outflows as investors remain wary of credit risk, especially in the software and business services sectors. According to S&P Global, U.S. speculative-grade default rates could climb to 4.75% by the end of 2026 if challenges like reduced AI investment or a prolonged Middle East conflict persist. LSEG Lipper reported that U.S. leveraged loan funds experienced $3.4 billion in outflows in March2—the biggest in about a year—after $2.4 billion left the market in February. Although broadly syndicated loans delivered their first positive return of the year last month3, default rates over the past twelve months remain higher than usual, and analysts continue to warn about risks from ongoing macro and geopolitical issues.
It looks like we are beginning to see the more optimistic picture play out – with demand holding strong for the end of April, indicating market sentiment improving. As the percentage of loans bidding above par rises and buying increases, the market picture looks optimistic, with the anticipation of new loan and CLO issuance.
2. Outflows From Leveraged Loan Funds Jump as Investors Shun Credit Risk
3. March Wrap: Leveraged loans post first positive return of 2026, issuance remains light – PitchBook
*our Highly Liquid Tracker of the 100 most liquid loans
**scored 4-7 by Octaura Liquidity Score
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