Leveraged loans had fallen to near pariah status as the financial crisis hit its peak, but like other distressed securities, they have since made a comeback. So much so that you have to wonder if the market has hit another top. 

We've certainly seen some jitters related to global economic phenomena, such as the Mideast upheaval and the Japan disasters. In mid-March, the market definitely hiccupped, as the likes of Toys R Us nixed plans for a bank loan refinancing. Asurion, which provides insurance on wireless devices, pulled a loan offering citing market conditions, notes Reuters. So did MedAssets, Fifth Third Processing, and food industry marketer Advantage Sales and Marketing. Was this a blip in an otherwise bullish market? 

That's hard to say. The market had been so hot that it was perhaps looking for a reason to pause. So, what can we really glean from such recent events? 

According to The Deal, "nearly all the pulled loans and bond offerings have been large institutional refinancings aiming to take out expensive debt, lowering the floor and spreads, and/or extending maturities, according to data tracked by Standard & Poor's Leveraged Commentary and Data. Nine out of the 13 loans pulled since March 9 were by private equity-sponsored companies, as was the bond offering pulled by information technology reseller CDW Corp. On the other hand, M&A-related debt for quality issuers, especially in the middle market, continues to push through." 

There are indeed plenty of reasons to be bullish. Rates remain low, and defaults are not the problem they once were. An there's more good news regarding collateralized loan obligations, many of which are built from leveraged loans: Moody's has announced it will soon de-weight a 30 percent default probability that had previously been built into the rating methodology and make other changes as well. "The combined effect would be a positive ratings impact, the agency said, averaging one notch for the best-rated tranches and up to three notches for the riskier, or junior, tranches," reports the Financial Times. One executive told the paper: "We learnt a great deal through the recent crisis about the performance of the underlying corporate loans as well as the CLOs." Fitch and Standard & Poor's have also revised their ratings methodololgy. 

Another sign of the long-term bullishness is the rise of leveraged loan ETFs. InvescoPowershares, a division of fund manager Invesco, has launched a loan fund that will seek to mimic the S&P/LSTA Index of the 100 U.S. leveraged loans.  The goal is to get retail investors to buy in. Is this a sign of a market top? - Jim