Leveraged-Loan Protections Deteriorating, Moody’s Says
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More than a year after regulators warned about deteriorating standards in leveraged loans, a Moody’s Investors Service report shows that risks to lenders are growing.
The percentage of the debt that Moody’s considers as having weak or the weakest investor protections known as covenants climbed to 65 percent of the market in the first half of this year from 60 percent in 2013 and 42 percent in 2012, the ratings firm said in the report released today. That’s the highest since at least 2008, according to Moody’s.