Leveraged-loan prices in Europe hit 89.11% of face value during the past week, a high not seen in more than a year, according to Markit and Standard & Poor's LCD. In the U.S., loan prices reached more than 90% of face value. The increase in prices along with a decline in the three-month Libor indicate that credit-market conditions are improving. Some analysts have voiced concern that a correction will take place. "Loans were oversold, but I am concerned that prices could now overshoot on the upside and there could be a correction," said Michael Hampden-Turner, a credit strategist at Citigroup.

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