Spreads on leveraged loans

Steven Miller, managing director of Standard & Poor's Leveraged Commentary & Data in New York, explains why spreads are paper thin on US leveraged loans


Leveraged loan volumes in the US were large and lumpy during the first quarter of 2006. Total new-money volume during the first three months of the year soared to $109 billion (see chart 1), the highest since Standard & Poor's LCD started tracking volumes in 1997, up from $74 billion in the fourth quarter and from $80 billion during the same period in 2005. This explosive growth was due largely to M&A-related jumbo financing.

It is said that one can never be too rich or too thin. But don't tell

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