Over the past six months, the all-in spread curve of the leveraged loan market has steepened significantly in the face of growing concerns about the credit cycle, overall, and the travails of a growing number of sectors—energy, metals/mining, retail, and commodities—in particular.
Indeed, the gap between the implied average yields of S&P/LSTA Index loans down the ratings grade have reached their highest levels since the credit crunch and its immediate aftermath. Managers say wider premiums reflect a general flight to quality that is normally associated with periods of high defaults or economic recession. - Steve Miller
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