RLPC-European Secondary Cash Loans, LevX Reach New Record Lows
LONDON, Dec 3 (Reuters) - European secondary cash loan prices settled at new record lows of 62.05 on Wednesday, while Europe's LevX index of leveraged loan credit default swaps (LCDS) also reached fresh lows.
The move lower in loans came as the iTraxx Crossover index, made of 50 mostly 'junk'-rated credits, jumped above 1000 basis points (bps), hitting record wides for the third consecutive day as services data confirmed the severity of the global economic slump.
On the loan markets, trading volume in both the cash and synthetic markets remained extremely thin and volatile, as market players awaited the outcome of the auction of a 440 million-euro portfolio of leveraged cash loans by Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), traders said.
On the cash front, average bids on Europe's top 40 leveraged loans lost another 12 basis points (bps) since Tuesday to settle at a record 62.05 percent of face value, RLPC data shows.
The LevX series 3 senior index of LCDS also reached new lows to officially close at 77.28-78.45, down from 78.48-77.5 on Tuesday.The index was quoted as low as 76.75-77.5 in intra day trade, traders said. Based on a recovery rate assumption of 70 percent, the LevX series 3 senior index is currently yielding in excess of 2,514 bps, according to one trader.
Source: http://www.reuters.com