Who's Buying Leveraged Loans Anyways?

Ted

FYI: The booming loan market for highly indebted companies has faced a lot of scrutiny in recent months. The IMF has repeatedly aired its grievances. Multiple central banks, as well as the banker of central banks, the Bank for International Settlements, have chimed in with their concerns as well. And last week, Massachusetts Senator Elizabeth Warren called for tighter regulation on what she believes is “a significant risk to the financial system and the American economy.”

Beyond deteriorating protections for lenders, critics have grown wary of just who is buying these loans. In recent years, it has increasingly been retail investors.
Regards,
Ted
https://ftalphaville.ft.com/2018/11/20/1542706123000/Who-s-buying-leveraged-loans-anyways-/

jerry

I guess I am as I purchased a managed mutual fund in my Roth IRA It seemed a better idea than a bond fund and I am still positive for the year. I wa s aware that these were not the best credit available but I trusted Fidelity to not buy stuff that would default. I guess time will tell if my faith was misplaced.. I never considered a non managed purchase or indexed fund. Is there one for these securities?

JoJo26

LLs are going to be a huge problem in the downturn; covenants are almost non-existent in many. Recovery rates are going to be much lower than historical averages.