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3Q18 Leveraged Finance Market Review & Outlook

> The high yield market advanced 2.44% during the quarter, according to the ICE BofAML High Yield Index, with CCC-rated issues leading. Despite some outflows from mutual funds, technical factors, on balance, provided support to the market, as issuance declined during the quarter and the market continued to shrink.

> The leveraged loan market posted positive returns for the quarter, gaining 2.00% and building on the previous two quarters. It was the strongest quarterly performance for loans since fourth quarter 2016. Gains occurred across all sectors, with Retail and Metals & Mining leading the way, and Diversified Media and Utilities lagging. There were no new defaults this quarter, signaling a reduction in forward looking projections.

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