Leveraged loan activity in the U.S. hit its lowest monthly level in two years during August, with $16.7 billion in new-money deals, according to S&P Capital IQ/LCD, Forbes reported today. Part of the reason for the unimpressive showing is the unofficial market holiday during the past two weeks. Another reason could be that loan arrangers and institutional investors were keeping their powder dry in August in preparation for what is expected to be an active post-Labor Day loan market. And there should be demand for those deals as investors continue to pour money into loan mutual funds. U.S. loan funds last week saw their seventh straight inflow of at least $1 billion. The August loan market activity brings year-to-date volume to $419 billion, well ahead of the $252 billion posted at this time in 2012 and nearing the $464 billion recorded during all of last year.
