First Trust Senior Loan ETF (FTSL) - NASDAQ
  • Thu, Apr. 14, 2:55 PM
    • "Our fundamental outlook for leveraged credit remains constructive," says Global CIO Scott Minerd, noting spreads of more than 900 basis points in February are consistent with six-month default rates in the 9-10% range - an overestimation in his view.
    • Though spreads have narrowed since, Guggenheim is still finding bargains in both high-yield (HYG, JNK) and bank loans, and Minerd reminds bank loan borrowers in particular could benefit from the Fed's caution on rate hikes (bank loans tend to be floating rate).
    • Guggenheim's Floating Rate Strategies Fund (MUTF:GIFAX) is near the top of bank loan funds, with an average annual return of 2.84% over the last three years.
    • Bank loan ETFs: OXLC, BKLN, PPR, EFR, VVR, ECC, BGB, PHD, SRLN, NSL, BGX, FCT, BSL, AFT, EVF, SNLN, TSLF, FTSL, TLI, BHL
    | Thu, Apr. 14, 2:55 PM | 9 Comments
  • Wed, Mar. 2, 8:23 AM
    • The average bid of LCD News' flow-name loan composite has surged 82 basis points over the few sessions to 96.49% of par. Of the 15 names in the sample, 13 advanced, none declined, and two were unchanged.
    • By far the biggest mover was Scientific Games B-2 term loan due in 2021, which was a bid a full five points higher after better-than-expected Q4 results.
    • ETFs: OXLC, BKLN, PPR, EFR, VVR, PHD, SRLN, BGB, NSL, ECC, BGX, FCT, SNLN, EVF, AFT, BSL, TSLF, FTSL, TLI, BHL
    | Wed, Mar. 2, 8:23 AM | 8 Comments
  • Dec. 18, 2015, 8:27 AM
    | Dec. 18, 2015, 8:27 AM | 18 Comments
  • Oct. 21, 2015, 9:15 AM
    • You wouldn't know it by today's busy M&A headlines, but a sizable slump in the prices of recent buyout loans, could threaten the pace of future deals.
    • Nearly half of the $75B in buyout loans arranged in the U.S. and tracked by Bloomberg are trading below their issue price, and leveraged loans could be headed for their first loss since 2008.
    • Investors have pulled cash from leveraged loan mutual funds for 12 straight weeks, and just $5.8B of CLOs were created last month, 34% below 2015's monthly average.
    • The result is underwriters forced to sell debt at the steepest discounts to par in four years and investors pushing for higher interest rates to buffer against possible principle loss. It didn't scare Western Digital away from SanDisk, but Dell could need to raise nearly $50B for its purchase of EMC.
    • Previously: Western Digital to buy SanDisk in $19B deal (Oct. 21)
    • Previously: Lam Research to buy KLA-Tencor in $10.6B deal (Oct. 21)
    • Senior loan ETFs: BKLN, OXLC, PPR, EFR, VVR, PHD, SRLN, NSL, BGB, BGX, FCT, SNLN, EVF, ECC, AFT, BSL, TSLF, FTSL, TLI, BHL
    | Oct. 21, 2015, 9:15 AM | 5 Comments
  • May 13, 2015, 12:02 PM
    • Vanguard Group, Guggenheim Investments, and First Trust are among U.S. ETF providers lining up bank credit lines or expanding existing ones in order to meet a rash of redemptions in some future market panic, writes Ashley Lau and Michael Flaherty.
    • At issue are ETFs in less liquid corners of the fixed-income world - bank loans (also known as senior or leveraged loans) and high-yield come to mind.
    • State Street (NYSE:STT) and Invesco's (NYSE:IVZ) PowerShares have credit lines for their respective senior loan ETFs (SRLN, BKLN, VVR), with SRLN having exclusive access to $100M of the $300M total credit facility State Street has in place.
    • BlackRock (NYSE:BLK) hasn't opened any lines for its bond funds as it doesn't trade in these less liquid areas, but it has opened a line for some its emerging market stock ETFs.
    • Senior loan ETFs: BKLN, OXLC, PPR, EFR, VVR, PHD, SRLN, NSL, BGB, BGX, FCT, SNLN, EVF, ECC, AFT, BSL, TSLF, FTSL, TLI, BHL
    | May 13, 2015, 12:02 PM | 10 Comments
  • Feb. 19, 2015, 1:22 PM
    • The AdvisorShares Pacific Asset Enhanced Floating Rate Note ETF (Pending:FLRT) will be managed by Pacific Asset Management and seeks to maximize yield while targeting highly liquid loans and debt securities.
    • While senior bank loans are high-yield assets, they are less risky then the average high-yield bond since in the event of a bankruptcy senior bank loans are the first debt to be repaid.
    • Other bank loan ETFs: BKLN, SRLN, SNLN, FTSL
    | Feb. 19, 2015, 1:22 PM
  • Feb. 11, 2015, 11:26 AM
    • There's $791B of high-yield debt coming due in the next five years, according to Moody's, raising at least some concern as most expect interest rates to be anywhere from slightly to significantly higher.
    • The projections are the highest since 2010, when Moody's said companies faced $1.2T in debt coming due. Things worked out all right for that wave as borrowers were able to refinance, usually at far lower interest rates. This time around, the Fed and ZIRP may not be around to help.
    • ETFs: HYG, JNK, BKLN, HYLD, SJB, SRLN, SNLN, ANGL, HYLS, FTSL, UJB, XOVR, QLTC
    | Feb. 11, 2015, 11:26 AM | 3 Comments
  • Jan. 27, 2015, 1:02 PM
    • After first sweetening terms to try and attract buyers, Apollo Global yesterday pulled a $400M deal meant to help fund its purchase of Presidio Holdings. And Apollo isn't alone. "Anything with a little bit of hair on it is more challenged," says Pimco's Jason Rosiak. "People are being more selective."
    • Outflows from high-yield funds began about nine months ago, and accelerated last week, with $738M in net redemptions bringing the year's total to $1.7B, according to Lipper.
    • Into this environment, Dollar Tree is trying to raise money for its $8.81B takeover of Family Dollar, and PetSmart needs $1.9B of bridge financing to close its BC Partners purchase.
    • "It's going to be a buyer's market," says one fund manager. "We’ll continue to see a bit of a premium.”
    • ETFs: HYG, JNK, BKLN, HYLD, SJB, SRLN, SNLN, ANGL, HYLS, FTSL, UJB, XOVR, QLTC
    | Jan. 27, 2015, 1:02 PM | 1 Comment
  • Nov. 26, 2014, 8:12 AM
    • Leveraged loan volume in November of just $6.5B, according to numbers compiled by Bloomberg, is set to be the slowest since the financial system suffered cardiac arrest in 2008. This follows volume of $30B in October.
    • Volume is plunging alongside prices, which fell more than 3% last month, forcing yields up to 6.2%, the highest in over two years. Regulators of late have also been taking a closer look at lending practices. Year-to-date, leveraged loan volume of $473B compares to about $700B for all of 2013.
    • Leveraged loans have returned 2.4% YTD vs. 4.6% over the same period one year ago, and vs. the 4.1% of junk bonds. Also a change from previous years, investors are quickly pulling money out of leverage loan funds - $15.5B YTD against inflows of $62.9B a year ago.
    • ETFs: BKLN, SRLN, SNLN, FTSL
    | Nov. 26, 2014, 8:12 AM
  • Nov. 11, 2014, 1:04 PM
    • The First Trust Enhanced Short Maturity ETF (NASDAQ:FTSM) garnered $1B in inflows in just one day last week, and has AUM of $1.7B only three months after launch. The only other actively-managed ETF to draw that kind of number that quickly was Pimco's Total Return ETF.
    • “It’s mind-boggling how quickly this fund has gained assets,” says ETF.com's Dave Nadig. “This is the ETF equivalent of money markets. This is where people are parking cash.”
    • The fund aims to hold mostly investment-grade debt with maturity of less than three years. The strategy is similar to Pimco's Enhanced Short Maturity ETF (NYSEARCA:MINT), but the First Trust offering, says Nadig, is more inclined to invest in riskier paper. To wit, about 5% of FTSM's assets are invested in First Trust's Senior Loan ETF (NASDAQ:FTSL).
    | Nov. 11, 2014, 1:04 PM
  • Nov. 7, 2014, 3:56 PM
    • "Banks must not heighten risk by originating and distributing poorly underwritten and low quality loans," says this year's review of bank lending from the Fed, OCC, and FDIC. "Institutions that participate in this lending activity, without implementing strong risk management processes consistent with the 2013 guidance, will be subject to criticism by the appropriate agency.”
    • Full report
    • Leveraged lending represented most of the underwriting issues observed by regulators, though the share of criticized leveraged loans fell from 2013 as big banks adjusted to last year's guidance meant to curtail deteriorating standards in the lucrative (for banks) industry.
    • “Thirty-one percent of leveraged transactions originated within the past year exhibited structures that were cited by examiners as weak, mainly because of a combination of high leverage and the absence of financial covenants,” says the report.
    • ETFs: BKLN, SRLN, SNLN, FTSL
    | Nov. 7, 2014, 3:56 PM
  • Oct. 22, 2014, 1:12 PM
    • The high-yield market "rebounded spectacularly" between last Wednesday's panicky action and the start of this week, says Martin Fridson. If one were to annualize the 1.32% total return from this period, it would work out to a 160.9% gain.
    • Some more numbers: The average yield in the BAML high-yield index topped 6.4% last week, and has dropped back to 5.9%, bringing the spread to Treasurys down more than 50 bps to 4.5%.
    • Barron's Michael Aneiro continues to see value in a number of sizable closed-end funds still trading at around double-digit discounts to NAV, notably the BlakcRock Corporate High Yield Fund (HYT +1.2%), the AllianceBernstein Global High Income Fund (AWF +0.2%), and the Wells Fargo Advantage Income Opportunities Fund (EAD +0.7%).
    • ETFs: HYG, JNK, BKLN, HYLD, PHB, SJB, SRLN, SNLN, IHY, ANGL, HYLS, FTSL, HYXU, PGHY, UJB, XOVR, QLTC, IJNK
    | Oct. 22, 2014, 1:12 PM | 3 Comments
  • Oct. 1, 2014, 9:08 AM
    • "Banks have been scolded and they have been warned, and yet you are seeing a lot of signals that the market is heating up,” says a bank regulation consultant as the Fed - its guidelines mostly ignored by banks - is now taking a closer look at the steamy leveraged loan (also called senior loan or bank loan) market. “We have seen this bad movie before," says the consultant. "The issue now is, will the regulators deploy the rest of the arsenal of tools they have?”
    • Previously, regulators collected loan data in an annual survey, but have shifted in recent weeks, say sources, to monthly oversight.
    • “Terms and structures of new deals have continued to deteriorate in 2014," said the Fed's Todd Vermilyea in a speech earlier this year. A report last month from Barclays says covenant-light loans are on track to exceed 70% of issuance this year - a record. Another report says total debt levels for large LBOs have risen to 6.26x EBITDA in Q3 from 5.89x in H1. The average at the peak in 2007 was 6.23x.
    • Related ETFs: BKLN, SRLN, SNLN, FTSL
    | Oct. 1, 2014, 9:08 AM
  • Jun. 27, 2014, 11:48 AM
    • Losing $403M in funds last week according to Lipper, loan funds (also known as leveraged loans, senior loans, bank loans) saw their 7th consecutive week of outflows - this after a 95-week streak of inflows going back to June 2012. Popular for not just their yields, but the adjustable nature of said yields, a little digging finds the variable nature is tied to Libor - which won't rise until the Fed actually hikes. Further, most loans have Libor floors, which means their rates won't rise until Libor has moved about 75 basis points.
    • ETFs: BKLN, SRLN, SNLN, FTSL
    • Municipal funds and ETFs, however, saw their eighth consecutive week of inflows, taking in $234M last week. ICI data show even bigger gains, with $798M of inflows last week vs. $805M the week prior.
    • ETFs: MUB, PZA, TFI, XMPT, PRB, PVI, VRD, RVNU, FMB
    | Jun. 27, 2014, 11:48 AM
  • Jun. 13, 2014, 11:34 AM
    • Investors pulled another $1.2B out of leveraged loan funds this week, the largest outflow in nearly three years, and the 8th week out 9 that money has exited.
    • It brings net outflows YTD to $2.5B vs. $62.9B of inflows in 2013 when worry over higher rates had money pouring into the floating-rate instruments.
    • ETFs: BKLN, SRLN, SNLN, FTSL
    • Previously: Trouble in loan fund land?
    | Jun. 13, 2014, 11:34 AM
  • May 20, 2014, 1:13 PM
    • Leveraged-loan ETFs last month had three consecutive weeks of withdrawals - the first such streak since the initial one of these was launched three years ago, according to Lipper. This streak combined with a recent general trend of outflows is a reversal from last year's record inflows as investors then - worried about higher rates - sought the funds out for their floating rate exposure.
    • Money comes and goes from all ETFs ... What's the big deal? Leveraged-loan (also called bank loan or senior loan) funds can't just buy or sell stocks as money flows, but instead their portfolios are made up of loans. “What happens if outflows continue? Who are you going to sell the loans to? It could disrupt that market,” says Dan Fuss.
    • "Realize that getting quick, easy access via ETFs to a tough-to-access market doesn’t happen for free," writes Brendan Conway.
    • Previous: Warnings on bank loan funds are not new
    • ETFs: BKLN, SRLN, SNLN, FTSL
    | May 20, 2014, 1:13 PM | 1 Comment
FTSL Description
The First Trust Senior Loan ETF (NasdaqGM: FTSL) will own a diversified portfolio that includes issuers with strong credit metrics. It might also invest in other instruments such as floating-rate loans of companies in financial trouble, floating-rate bonds, money market instruments and fixed-rate debt securities.
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Country: United States
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