From record volumes to new protocols and platforms, here’s what shaped the year on Octaura.
🚀 January: Primary market activity spiked to the 2nd highest on record.1 Secondary Trading volume was +83% MoM on Octaura. An uptick in trading on the platform during busy new issuance periods is a theme we’d see all year.
📈 February: Loan prices on Octaura began to fall (down ~ 1/4pt) as tariff concerns started to take center stage. Inquiry on the platform remained balanced (51% buying).
🎯March: Octaura observed tariff risk filtering through the market, triggering outflows and selling. Loan prices fell ~75c on the month. Traded volumes on the platform were up 120% MoM and 1,222% YoY. 70% of inquiry was customer selling.
🕛April: “Liberation day” saw VIX spike to the mid 40’s.2 Bid/offer spreads nearly doubled across liquidity buckets before normalizing toward the end of the month. Loan prices on Octaura fell 1.85pts in the first week of the month, then recovered to finish down 77c. Sellers used Octaura to manage outflows and buyers used it to source risk opportunistically. Overall inquiry was balanced (55% from sellers).
📊 May: Opportunistic buying replaced outflow-driven selling; cost to buy rose to 13 cents, while cost to sell dropped from 23 cents to 9 cents on Octaura.
☝️June: Post volatility e-trading volume continues to climb as clients leaned into all protocols across Octaura, buyers made up 72% of the inquiry.
🏦July: New issuance spiked to make July one of the busiest months on record3 – with additional dealers contributing to increased liquidity on the platform. Plus, Octaura secondary loan trading market share spiked at 6.4% according to the LSTA.
↗️ August: No summer slow here, 159 WICs on the platform as the dealer community provided over 14,000 responses, and high dollar prices motivated equity investors to call deals, with record warehouses open to support the market.
💲September: As of mid- September, we saw a large portion of the loan market trading above par on Octaura, reflecting stronger demand and tighter credit spreads, especially in the more liquid bucket of loans– scored 8-10 following rate cuts.
🌎October: Octaura saw how a few macro cross-currents resulted in a bifurcation of performance on the platform, due to tensions caused by the Chapter 11 filing by First Brands, tariff volatility, government shutdown risks and US-China tensions.
📶November: Liquidity bias widened – most liquid loans (OLS 10+) outperformed least liquid (OLS 3-5) on Octaura, with spreads at their widest point YTD.
⚡December: Octaura closed out the week of Dec 8th with our largest trading day ever on the loan platform; with over $1.4BN traded in a single day.
A lot has happened in 2025, with relative price improvement showing a mixed picture throughout the year for buyers and sellers.
What else we are watching in 2026
Despite macro uncertainty and sectoral headwinds, secondary loan trading volumes grew 25% MoM in October according to the LSTA, and Octaura sees the market on track to hit $1T by year-end7. As the market continues to grow, here are some things we are watching:
Across the market:
Strong CLO issuance in 2026 – as investor demand increases and high refinancing rates could suggest issuers are taking advantage of favorable conditions to lower coupon costs, improving arbitrage for CLO equity. Analysts for Deutsche Bank, Morgan Stanley, BofA Securities and Barclays all project issuance of between $145-160 billion in new BSL issuance.4
Idiosyncratic risks – Following defaults from First Brands & Tri Colors, as it continues to ripple across CLOs, BDCs, and other funds, 2026 may prove essential for monitoring stress indicators in the market. Growing idiosyncratic defaults could make real-time mark-to-market pricing and transparency essential for risk management.5
Growth in broad index products: Some firms have increasingly implemented systematic loan investment strategies that enable broader diversification and better risk control, increasing their holdings of loans to decrease concentration risk.6 New strategies like these are bolstered by the efficiency and transparency that results from electronic trading.
The complex interest rate backdrop: Floating-rate loans stand to benefit from anticipated Fed cuts, improving borrower metrics and supporting issuance. Despite volatility, loans offer attractive carry and quick rebound. Compared to fixed rate debt, loans can offer higher flexibility amidst a confusing interest rate backdrop.
Wider spreads and tighter valuations – Based on what Octaura has seen thus far on the platform, we are expecting to see an environment with widening spreads due to heightened credit risk amidst refinancing pressure, defaults, and macro uncertainty, as well as tighter valuations a result of increasing prices.
Stay tuned for more insights and innovations from Octaura in the new year.
Sources:
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