Report published August 13, 2026
UBS Credit Market Update (August 2026): Leveraged Loans, High Yield, and CLO Trends
Source and citation context
- Issuer
- UBS
- Report date
- August 13, 2026
- Analysis as of
- July 31, 2026
Authors / editors: Credit Investments Group
Finvaulta summarizes UBS's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
In July 2026, US leveraged loans gained 0.80% (2.17% YTD), outperforming high yield bonds (-0.29%) as hawkish Federal Reserve signals weighed on duration assets. Loan spreads tightened 7 bps to 493 bps while high yield spreads widened 10 bps to 285 bps amid modest increases in default rates.
Key Takeaways
- 1.US leveraged loans outperformed high yield bonds in July 2026, gaining 0.80% (2.17% YTD) as rate expectations weighed on longer-duration credit while high yield fell -0.29% (1.59% YTD).
- 2.Yields rose across the credit complex in July, with the 3-year yield on the S&P UBS Leveraged Loan Index climbing 16 bps to 9.09% and US high yield yield-to-worst rising 27 bps to 7.42%.
- 3.US CLO year-to-date new issuance reached $94.6bn across 204 deals, lagging 2025's $121.6bn pace, while US CLO fundamentals generally improved with declining tail risk (9.3% trading below 90).
Table of Contents
- Credit market performance overview and review
- Appendix: Market data and charts
- About the Credit Investments Group
- Index Definitions
Report data
Exhibit 1: Total returns for various asset classes – July 2026 — as of July 31, 2026.
| Metric | Estimate | Context |
|---|---|---|
| US Leveraged Loan Total Return | 0.80% | US leveraged loans return for July 2026, bringing YTD to 2.17% |
| US High Yield Bond Total Return | -0.29% | High yield bonds return for July 2026, bringing YTD to 1.59% |
| Leveraged Loan 3-Year Yield | 9.09% | S&P UBS Leveraged Loan Index 3-year yield at month-end |
| High Yield Bond Yield-to-Worst | 7.42% | High yield index YTW ended July at 7.42% |
| US Leveraged Loan Default Rate (LTM par-weighted) | 2.32% | Trailing 12-month par-weighted leveraged loan default rate including distressed exchanges |
Reports in this series
Credit Market Update is shown in chronological order through this edition, published on August 13, 2026.
- Jul 14cig-commentary-july
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Authors / Editors
Reported Data Context
- US Leveraged Loan Total Return: 0.80 % (July 2026) · Source: Bloomberg, UBS, S&P Indices
- US High Yield Bond Total Return: -0.29 % (July 2026) · Source: Bloomberg, UBS, S&P Indices
- Leveraged Loan 3-Year Yield: 9.09 % (July 2026) · Source: Bloomberg, UBS, S&P Indices
- High Yield Bond Yield-to-Worst: 7.42 % (July 2026) · Source: ICE Data Services, UBS, S&P Indices, Bloomberg
- US Leveraged Loan Default Rate (LTM par-weighted): 2.32 % (July 2026) · Source: JP Morgan