Once Shunned Loans Are Now a Market Darling: Credit Weekly
- Total returns nearing double digits on soft landing narrative
- Borrowers are upsizing loans as investor demand surges
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Fixed-income investors that are “risk on” are benefiting from the global economy’s ongoing resilience, fueling appetite for leveraged loans in particular.
Total returns from the assets are about 10% so far this year, according to a US leveraged loan index, and the average price of a leveraged loan in the secondary market is a bit less than 96 cents on the dollar, the highest since May 2022 after inflation exceeded expectations.