LEVERAGED LOANS
$BKLN $HYG $JNK
"They are potential ticking time bombs sitting in the documentation"
$BKLN $HYG $JNK
"They are potential ticking time bombs sitting in the documentation"
The erosion of covenant protections also means the CLO holders and other investors in leveraged loans, such as mutual funds, are more vulnerable to losses than in the past. Recovery values as a result could be lower than average when defaults do occur, Oaktree said.
Almost 75% of issuers in the US have only loans in their debt capital structure, according to JPMorgan Chase & Co., compared with 50% in 2013.more than 90% of the leveraged loans issued in 2020 and early 2021 have limited restrictions on what borrowers can do with money
CCC vs. BB SPREADS
Leveraged loan quality has gotten significantly worse the past few years relative to High Yield Bonds
Oh, and imagine paying floating rates plus everything else going on...
$HYG $JNK $BKLN
Oh, and imagine paying floating rates plus everything else going on...
$HYG $JNK $BKLN
TIGHTENING 🪢 LENDING STANDARDS
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