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Leveraged Loans Lose Market-Darling Status on Weaker U.S. Demand

  • Prices were at highest levels since 2007 ahead of Fed hikes
  • Index now back at January 2021 levels amid Russian invasion

U.S. leveraged loans, one of the hottest markets just a few weeks ago, have hit a major snag amid Russia’s invasion of Ukraine.

Loans were trading at highs not seen since 2007 in January, thanks to the fact that their interest rates float -- an alluring quality as the Federal Reserve prepares to boost rates. But they have now sunk to where they were in January 2021, according to the S&P LSTA Leveraged Loan Price Index.