“Though the trailing default rate in leveraged loans has remained stubbornly below its 2.9% historical average, several indicators point to increasing pressure.” – by Rachelle Kakouris
Levered Loans
CLO market: Corporate distress? Bring it on (Euromoney)
“Ask any market participant where they think that the next crisis is coming from and their answer will almost always be corporate credit. We have been watching the market very closely and have seen degradation in investment grade. BBB is the new A.” – by Louise Bowman
Restructuring the next wave of cov-lite debt (JDSupra)
“89% of European HY bond deals in 2018 provided for cost savings and/or synergies to be included in EBITDA or pro-forma adjustments.” “85% of all leveraged loans in the UK were cov-lite by the end of 2018.” by White & Case
A leveraged loan bust will hurt less than subprime mortgages (FT)
“Expect investors rather than banks to be hardest hit by the next meltdown” – Anthony Carter