S&P/LSTA U.S Leveraged Loan Index Update, New ETF Coming

Below is a presentation on the leveraged loan market by S&P/LCD. It covers trends, price returns, leveraged loan volume, loan default rates, new issue clearing yields and forecasts . Also read: 2010 Leveraged finance volume recap: A record rebound (and dividends)" by LCD. After the video and slides, I threw up a charts of the S&P Leveraged Loan 100 index, Credit Suisse Leveraged Loan Average and info on the new Invesco PowerShares Leveraged Loan ETF.

Credit Suisse Leveraged Loan Index Average since 2007 (DLJLPX at Bloomberg.com)

S&P/LSTA U.S. Leveraged Loan 100 Total Return Index (SPBDLL at Bloomberg.com)

S&P/LSTA U.S. Leveraged Loan 100 Index Weighted Average Bid Price
 (SPBDLLB at Bloomberg.com)

Now on that new S&P/LSTA Leveraged Loan ETF. Quotes from the SEC filing on 11/4/2010:

"PowerShares S&P® Bank Loan Portfolio

"Investment Objective

The Fund seeks investment results that correspond (before fees and expenses) generally to the price and yield of an index called the S&P/LSTA U.S. Leveraged Loan 100 Index (the “Underlying Index”)."

"The Underlying Index consists of 100 loan facilities drawn from a larger benchmark, the S&P/LSTA (Loan Syndications and Trading Association) Leveraged Loan Index (“LLI”), which covers more than 1,100 facilities and has a market value of more than $480 billion as of September 30, 2010."

"Index Eligibility

All syndicated leveraged loans covered by the LLI universe are eligible for inclusion. Term loans from syndicated credits must meet the following criteria at issuance in order to be eligible for inclusion in the LLI:

· Senior secured first lien.

· Minimum initial term of one year.

· Minimum initial spread of 125 basis points over LIBOR.

· U.S. dollar denominated.

· Par amount outstanding of US$ 50 million or greater."

Also read: PowerShares Drafts Bank Loan ETF - Index Universe

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