Return of the loan market
The leveraged loan market has seen a surge in demand this year, delivering returns that other asset classes can only dream of. Steven Miller reports on the factors behind thissuccess story, and discovers that the only short-term barrier to growth is a shortage of supply
The high-yield bond market may seem an attractive proposition for investors focused on current income, but over the past year, savvy accounts have picked up on a less well-known alternative: the market for syndicated leveraged loans. Buoyed by ebbing defaults, surging asset prices and low volatility, the loan market is riding a wave of its own, generating risk-adjusted returns that outpace other asset classes.
Between October 2002 and September 2003, the leveraged loan market returned 8.96%, or
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