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Leveraged Loan Rally Extends as Cash Pours Back in

  • Investors see bargains after bounce from lowest since 2016
  • ETF flows turning positive adds further boost to sentiment

U.S. leveraged loans traded higher in the secondary market on Monday as money flowed back into exchange-traded funds. The market is underpinned by the rates outlook and firm economic fundamentals, though it remains susceptible to another big drop in equities.

Building on Friday’s rally -- the best one-day loan return in 10 years -- investors continued to buy the more liquid loans in the secondary. Dell’s $5 billion term loan rose by about 0.5 cents to 98.5 cents on the dollar Monday, after gaining 2 cents on Friday, according to loan traders who are not authorized to speak publicly.