Why Leveraged Loans Could Be the Next to Fall in Credit

The video discusses the current state of the market, highlighting the stability of certain sectors and emerging cracks in others. It focuses on the impact of leverage loans and high yield credit, with investor nervousness growing. The threat of a pandemic exacerbates concerns about high yield debt and potential downgrades. Leveraged loan fears are particularly pronounced in energy bonds due to falling oil prices and covenant light structures. Investors are cautious, evaluating their portfolios carefully. Market volatility has led to delays in new deals, with issuers like Bausch postponing refinancing plans.

What concerns do investors have regarding leveraged loans in the current market?

What specific fears are associated with high yield debt and potential bankruptcies?

What are the implications of lower recoveries in leveraged loans?

In what ways are investors evaluating their portfolios amidst current market conditions?

How has the recent volatility affected issuers' plans for loan refinancing?