June shines as the US Leveraged Loan Market Booms, Getting a Record Jackpot of $1.5 trillion Amid Increasing Risk Appetite

The US leveraged loan market returned 0.80% in June, bolstered by the rally in prices and the ameliorated risk appetite. Better market conditions and a wider capital markets rally swung the technicals to support borrowers. Contributing factors include stronger consumer sentiment, the pause in the implementation of US tariffs, and declining geopolitical tensions.

While new issuance displayed signs of recovery, the cumulative volume for the year was still trailing 23% behind the levels of 2024. Yet, despite muted M&A activity, the loan market registered a notable milestone by reaching $1.5 trillion in June, the quickest annual growth since late 2022.

Following a trend from May, secondary prices continued to ascend, elevating the year’s return to 2.81%. The end of the month showed a 41% uptake on the share of loans priced at par or higher, indicative of growing investor demand.

Echoing the optimistic sentiments of the market, repricing activity accelerated in Q2, indicating overall stronger credit quality compared to Q1. Meanwhile, the primary market activity, inclusive of repricings, peaked at $65.4 billion in June, the highest in four months. However, compared to late 2024 and early 2025, the new loan issuance for Q2 was relatively understated.

The size of the index set a new record, with the loan market growing by over 7% in the last 12 months. This is the fastest growth rate since October 2022.

Year-to-date, the leveraged loan market has succeeded in gaining 2.81%, with interest income helping to neutralize market value losses. Despite high base rates that typically boost returns on floating-rate assets, 2025’s performance is only looking slightly above average.