Leverage loan flow-name bids slip 21 basis points, extending last week's loss

The average bid of LCD's flow-name loan composite continued its slide, dropping 21 basis points in today's reading to 99.33% of par, from 99.54 on Jan. 27. The decline marks the second consecutive significant decline for the composite after it plunged 29 bps in last week's reading. Of the 15 names in the sample, 13 moved lower while no loans were quoted higher.

Leading the decliners in today's reading was CenturyLink's term loan B due March 2027, which dropped half a point to 98.375/98.75, from 98.875/99.25 on Jan. 27. Charter Communications Holding Co. LLC's term loan B due February 2027 slipped a quarter of a point despite reporting earnings that saw fourth-quarter adjusted EBITDA come in slightly ahead of estimates at $5.295 billion. Meanwhile, Univision Communications Inc.'s TLC-5 due March 2024 ticked down an eighth of a point despite the term loan being upgraded by S&P Global Ratings to B+, from B, on the completion of its merger with Televisa's media assets. The only two loans that were unchanged in today's reading were BMC Software Inc.'s TLB due October 2028 and Scientific Games Corp.'s TLB-5 due August 2024.

The broader S&P/LSTA LL 100 also posted another decline, dropping to an average bid of 98.46 on Feb. 2, from 98.64 on Jan. 26. While the average bid dropped significantly over the past week, the index gained back 10 bps in yesterday's session, jumping from an average bid of 98.36 on Feb. 1.

By ratings, here's how bids and the discounted spreads stand:

* 99.27/L+295 to a four-year call for the 12 flow names rated B+ or higher by S&P; STM in this category is L+286.

Loans vs. bonds
The average bid of LCD's flow-name high-yield bonds decreased 65 bps, to 100.07% of par, yielding 5.16%. The gap between the bond yield and discounted loan yield to maturity stands at 184 bps.

To-date numbers

*February: The average flow-name loan decreased 21 bps from the final January reading of 99.54.

*Year to date: The average flow-name loan increased 10 bps from the final 2021 reading of 99.23.

Loan data

*Bids fall: The average bid of the 15 flow names decreased 21 bps, to 99.33% of par.

*Bid/ask spreads rise: The average bid/ask spread increased 3 bps, to 37 bps.

*Spreads rise: The average spread to maturity—based on axe levels and stated amortization schedules—rose 5 bps, to L+301.