Over the past six months, the all-in spread curve of the leveraged loan market has steepened significantly in the face of growing concerns about the credit cycle, overall, and the travails of a growing number of sectors—energy, metals/mining, retail, and commodities—in particular.

Indeed, the gap between the implied average yields of S&P/LSTA Index loans down the ratings grade have reached their highest levels since the credit crunch and its immediate aftermath.

Managers say wider premiums reflect a general flight to quality that is normally associated with periods of high defaults or economic recession. – Steve Miller

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This story first appeared on www.lcdcomps.com, LCD’s subscription site offering complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.