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Leveraged credit market faces investor exodus

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(Bloomberg) — The investor love for leveraged loans seen earlier this year is over.

A measure of market performance, the S&P/LSTA Leveraged Loan Price Index closed Monday at 96.34, the lowest level since Jan. 4, 2021. The index is down 1.6% on a full-year return basis. till the date.

That level is a far cry from earlier this year, when leveraged loans were the most popular credit, as money managers flocked to the floating-rate asset class as they prepared for a year of rate hikes. Now, with the war in Ukraine and sanctions on Russia fueling stagflation concerns, investors are fleeing risky assets, including leveraged loans, adding further pressure to an already weak leveraged buyout portfolio.

The sell-off is the latest sign that banks will work harder to boost demand in a weakening market environment. US speculative-grade bonds posted their biggest one-day loss in nearly two years on Monday.

original note:

Leveraged loan market faces investor exodus as prices fall

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