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Leveraged loans: False alarm?

05/06/2019

The growing chorus of concern (and scrutiny) over the leveraged loan market has not gone unnoticed – but is it warranted? When it comes to assessing the risks inherent in today’s global loan market, it is important for investors to be able to separate fact from opinion or claim – and everything else in-between. In this paper, we take a closer look at leveraged loans and how today’s market differs from pre-crisis times.

  • There has been no let-up in the negative press and regulatory headlines about leveraged loan markets and we believe there is a need to redress the balance
  • The prevalence of cov-lite warrants caution and scrutiny from lenders but business size and quality is high and default risks are low
  • Fundamentals are largely supportive and loan yields compensate for the risk of credit loss

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The information on this website is for Institutional Investors only. Specifically, the information on these pages should not be used or relied upon by the public of Hong Kong or any other type of investor from any other jurisdiction.