Morgan Stanley Investment Management
June 30, 2026
Floating-Rate Loan Market Monitor
Quarterly UpdateRates CreditStructured ProductsOther
The Q2 2026 Floating-Rate Loan Market Monitor provides an analysis of the leveraged loan asset class, highlighting its role as a senior, floating-rate component in portfolios. It details current market performance, structural characteristics of loans and CLOs, and portfolio integration benefits.
Key Takeaways
- 1.Floating-rate loans act as a senior, secured layer of the capital structure with low loan-to-value due to junior capital cushions.
- 2.Loan returns have historically shown a negative correlation to core bond allocations, offering potential portfolio diversification benefits.
- 3.CLO tranches offer attractive yields relative to credit ratings compared to traditional corporate bond indices.
Table of Contents
- Asset Class Review
- Market Update
- Portfolio Applications
- Collateralized Loan Obligations
- About MSIM
- Additional Information
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Authors
Floating-Rate Loan Investment Team
Securities
Morningstar LSTA US Leveraged Loan Index
Themes
CLO Market EvolutionFloating-Rate IncomeInterest Rate Hedge
Regions
EuropeUnited States