Ion Trading Technologies Ltd., a provider of trading software, and broker-dealer LPL Financial Holdings Inc. (LPLA) led companies seeking loans, while Invesco (IVZ) Ltd.’s exchange-traded fund reported its biggest trade of the year.
Ion is seeking $1.12 billion of loans to support a dividend payout and debt refinancing, according to a person with knowledge of the matter. LPL Financial, which specializes in the technology and service businesses, is seeking a $1.08 billion term loan to support refinancing and general corporate purposes, according to another person with knowledge of the deal who asked not to be identified because the transaction is private.
Invesco’s ETF, which invests in the largest first-lien loans, reported its biggest trade of the year with 2 million shares changing hands at 2:32 p.m., according to data compiled by Bloomberg. The PowerShares Senior Loan (BKLN) fund, started two years ago as the first ETF solely dedicated to purchasing floating-rate debt, has more than double its market capitalization to $3.8 billion.
First Trust Advisors LP, the Wheaton, Illinois-based money manager, will start an actively managed senior loan ETF tomorrow, becoming the fourth ETF in the bank loan space.
The price of loans rose 0.02 cent to 98.57 cents on the dollar today, the highest level since July 2007, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index. The average yield of loans has dropped to 5.62 percent from as much as 6.15 percent at the start of the year, even as the same measure for junk bonds trade 33 basis points tighter at 5.29 percent, according to JPMorgan Chase & Co.
Ineos Group Holdings SA, a chemical maker based in Rolle, Switzerland, increased the size of a loan by $70 million to $640 million, while a 300 million-euro ($397 million) piece was boosted to 350 million euros.
Charles Schwab Corp. (SCHW), whose antitrust claims against banks over manipulation of the London interbank offered rate were tossed from federal court in New York, sued Bank of America Corp. and other financial institutions for fraud in state court in San Francisco.
Participants in the floating-rate loan market rely on the benchmark measure to price a majority of the new loans coming into the market. A basis point is 0.01 percentage point.
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