Markit Group Ltd.'s LCDX index, which tracks the prices of leveraged loans, rose to 92 by midday Tuesday, up from a close of 91.77 Monday and 90.81 on Friday. Bond prices have also been reviving, as Standard & Poor's Leveraged Commentary & Data unit reported that the averaged bid for high-yield credit rose 83 basis points Tuesday to 87.98.
Ironically, the banks' selling could very well squelch the market rebound as there is still not enough demand to absorb everything the banks have to sell, said one market participant. "They'll kill this rally, but in the meantime they'll get rid of $5 billion to $10 billion of debt," said one hedge fund investor who has been buying loans.
One market source said that Goldman, Sachs & Co. and Credit Suisse Group have been particularly aggressive. Check out The Deal's Vipal Monga's full report
here.
- Maria Woehr
