August Wrap: Loans return 0.93%, buoyed by rebound in software sector

In August, the US leveraged loan market saw a return of 0.93%, marking the second-best performance of the past year, according to the Morningstar LSTA US Leveraged Loan Index. The month's gains were primarily driven by the software and IT services sectors, which saw returns of 2.24% and 2.13%, respectively. The software sector, despite having a market-value weight above 1% that is still negative for the year, made significant strides in August, helping to narrow its year-to-date loss to 2.60%.

Performing software loan prices increased by 127 basis points in August, reaching 87.73% of par. The rest of the market, however, remained relatively stable, with the index's weighted average bid rising by 41 basis points to 95.58.