Credit Market Update

Latest edition · September 16, 2026

cig commentary sep

Leveraged loans and high yield bonds delivered positive returns of 0.95% and 0.99% respectively in August 2026, alongside general spread tightening. Both asset classes benefited from solid demand and fund inflows despite upward pressure on longer-dated Treasury yields from persistent inflation concerns.

August 2026 saw positive performance across risk assets, led by sub-investment grade credit. US leveraged loans advanced 0.95% with spreads tightening 16bps to 477bps, while US high yield gained 0.99% as OAS narrowed 22bps to 263bps. Mutual fund flows turned positive for both loans ($3.3bn) and high yield ($0.5bn). In structured credit, US CLO new issuance was $18.4bn in August, bringing YTD volume to $113.0bn, trailing 2025's pace. Meanwhile, default rates remained moderate at 2.33% for loans and 2.63% for high yield, with CLO spreads tightening down the capital stack.

Key takeaways from the latest edition

• 1.US leveraged loans rose 0.95% in August (3.15% YTD) and high yield bonds gained 0.99% (2.60% YTD), supported by robust technicals and earnings.
• 2.Credit spreads tightened across both US loans (3-year DM tightened 16bps to 477bps) and high yield (OAS tightened 22bps to 263bps).
• 3.US CLO new issuance reached $18.4bn across 39 deals in August, bringing YTD volume to $113.0bn, lagging behind 2025's pace of $139.4bn.

What this series covers

• Credit market performance overview and review
• Appendix: Market data and charts
• About the Credit Investments Group

Edition archive

• cig commentary sep

  September 16, 2026

• cig commentary aug

  August 13, 2026

• cig-commentary-july

  July 14, 2026