Loans lag high-yield bonds on a yield-to-worst and current yield basis, analysts led by Brad Rogoff wrote in a report today. Investors should consider swapping out of loans into comparable secured bonds, the analysts wrote.
Leveraged loans and high-yield bonds are rated below Baa3 by Moody’s Investors Service and less than BBB- by Standard & Poor’s. Loans are typically repaid first in a bankruptcy before bonds.
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