Leveraged Loans Loom Large

While subprime mortgages continue to cause pain for many major financial institutions, banks face problems in other parts of their business

For many banks, leveraged loans remain an issue. Not only has the value of these loans declined, banks are finding it difficult to unload the debt onto third parties. While this is a relatively small asset class compared with collateralized debt obligations (CDO), which have been a key component of the credit dilemma, they nevertheless represent another facet of the ongoing turmoil in the financial markets.

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