Leveraged Loans at Risk From Higher Financing Costs: Algebris

The video discusses the performance and conditions of the leveraged loan market, highlighting its strong performance in October and the significant demand for Cielo issuance. It examines the market's technical aspects, including the impact of high yield outflows and the attractiveness of floating rate components. The discussion also covers the risks associated with top-heavy capital structures and the potential impact of rising interest rates on borrowing costs. Investment strategies are explored, emphasizing the importance of understanding market dynamics and the implications of changing interest rates.

What is the significance of the floating rate component in leveraged loans?

In what ways might rising interest rates affect companies with leveraged loans?