In this edition of the Lakemore Insights – January 2022 report, we note that anticipated rate hikes from the Federal Reserve have resulted in strong outperformance for the leveraged loan market. While the loan primary market delivered a busy start to the year, we expect new issue CLO activity to ramp up in the second half of Q1. As anticipated, in our view, the Sofr transition has not had a material impact to date on CLO equity arbitrage, which continues to hover around historical highs of 20%.