To think it was less than three months ago that we wrote that "leveraged loan demand is off the charts as dangers mount." Since then, a lot has happened in the credit market, with yields and spreads blowing out in credit in a much delayed response to said mounting dangers and turmoil in the equity market, eventually hitting the leveraged loan market too, where as we wrote last week, loan prices have fallen precipitously as loan funds suffered dramatic redemptions in recent days, most notably the Blackstone leverage-loan ETF, SRLN, which last week saw its largest ever one-day outflow since its inception.

Fast forward to today when while credit appears to have found a shaky, tentative floor over the last few days, leveraged loans - which started falling later than other markets this quarter - are still sliding, and as long as funds keep pulling money out, will probably keep falling.

While floating-rate loans tend to track bonds, they are often slower to react both to the upside and downside. Since Oct. 1, loans have lost about 2%, including a 1% drop this month, while both high-yield and investment grade bonds rose slightly. In fact, since we last checked in on the S&P/LSTA lev loan index last week it has fallen another full point, and is now down to 95.4, its lowest price in over two years.