Reported 6 months ago
Investors are favoring leveraged loans as a top performer in credit markets due to the appeal of floating-rate debt amid expectations of prolonged higher interest rates. Leveraged loans have yielded 4% for investors in 2024, alongside Asia-Pacific credit, outperforming investment-grade corporate bonds which have lost 1.5%. The high demand for leveraged loans has led to reduced debt costs for companies and a record-breaking month in May for US leveraged loan borrowers, with $160 billion in debt financings. Despite some economic weaknesses, the stable economy and signs of cooling inflation suggest low default rates in the near future, attracting risky corporate borrowers back to the market.
Source: YAHOO