Leveraged Loans Are Sinking, Even as Junk Bonds Find Support

Credit found a floor over the last few days, but leveraged loans -- which fell later than other markets this quarter -- are still sliding. As long as funds keep pulling money out, loans will probably keep falling.

Floating-rate loans tend to track bonds, though they are often slower to react. Since Oct. 1, loans have lost about 2 percent, including a 1 percent drop this month, while both high-yield and investment grade bonds rose slightly.