Loan investors brace for lower recoveries

Buy-siders expect to recoup up to 30 percentage points less if borrowers default

loan recovery downwards money

Leveraged loan investors are expecting to recoup less capital when companies default, after more than a decade of low rates eroded creditor protections in loan documents.

The average amount recouped by investors if a lender defaulted – known as the recovery rate – has historically been around 65–70% of a loan’s principal in the US and 75–80% in Europe. Now, participants in both markets are expecting the figure to be as much as 30 percentage points lower.

Investors say that lax lending

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here