Leveraged Loan Market Shows Signs of Thawing

The video discusses the recent dislocation in the leverage loan market and how banks were unprepared for it. They responded by holding loans and offering discounts to sell them. The market has shown signs of recovery, but caution is still advised. Selective investment strategies are recommended, especially in high yield bonds. CLOs have taken a wait-and-hold approach due to massive outflows. Banks are becoming more cautious in negotiations, with a return to some safeguards.

What strategy did banks adopt in response to the leverage loan market dislocation?

• They sold all their loans immediately.

• They opted to hold some loans.

• They increased interest rates.

• They stopped offering loans.

What is the current state of the leverage loan market according to the second section?

• It is completely healed.

• It is still frothy like before.

• It has healed but is not fully recovered.

• It is in a worse state than before.

What is the main concern in the software industry related to the leverage loan market?

• Low demand for software products.

• High competition.

• Excesses in the industry.

• Lack of investment opportunities.

What happened in December that affected the leverage loan market?

• Massive outflows from the market.

• A new regulation was introduced.

• A significant increase in interest rates.

• Massive inflows into the market.

How are banks adjusting their approach to covenants with investors?

• They are becoming more cautious.

• They are removing all covenants.

• They are not making any changes.

• They are becoming more lenient.