Market Review and Outlook 4Q20 - Leveraged Finance
Resilience Abounds
For 4Q, the JP Morgan Leveraged Loan Index returned +3.78%, bringing the 2020 return to +3.19%, but loans drew more attention in early January as rates rose. The ICE BofA US High Yield Index had a 6.48% return. The confluence of election results and COVID vaccine announcements set the stage for a powerful rally, led by companies with strong business models and a significant liquidity runway to deal with the pandemic.