Loomis on Loans

The Morningstar LSTA Leveraged Loan index returned 5.90% in 2025 driven by strong interest income, as base rates remained higher than forecasted. Spreads in the market also ended flat year-over-year, tightening into year-end after some widening earlier in the year. Loan prices ended the year on a strong footing with the often quoted “bid above par” percentage ending the year at an 11-month high (58%) after starting the year very strong as well.  Demand for loans remained robust given the record issuance in the CLO market (the biggest buyer of loans) and strong demand from other institutional lenders.