Leveraged loans are delivering the smallest returns at the start of a year since 2008 as the Federal Reserve and other regulators warn that the $561 billion market may have become too frothy.

Speculative-grade loans have gained 2.1 percent in 2013, compared with an average of 5.6 percent in the same period the last four years, according to the Standard & Poor's/LSTA U.S. Leveraged Loan 100 Index. JPMorgan Chase & Co. is forecasting the debt will return from 5 percent to 6 percent in 2013, or about half the gains seen last year.

The slowdown may signal that investors are heeding the concern expressed by the Fed that money for the neediest borrowers is too easy even though default rates are below the historical average. Investors are pushing back on terms of some deals, demanding that Blackstone Group LP-owned Apria Healthcare Group Inc. pay more for a $750 million loan it's seeking.