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Leveraged Loans Are Flying Off the Shelves

  • AkzoNobel, Thomson Reuters deals found strong demand this week
  • Some analysts caution that future returns may be lackluster
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Money managers, eager for assets whose yields rise as the Federal Reserve hikes rates, snatched up some of the year’s biggest leveraged loan offerings this week. Some caution that investors may be buying at the wrong time.

Usually after the Fed tightens the money supply, economic growth slows, which results in more defaults on corporate debt and lower returns for the whole loan market, said Gershon Distenfeld, co-head of fixed income at AllianceBernstein LP.