Borrowing activity in the leveraged loan market has hit near-record levels in Q1, but this does not indicate a revival of company balance sheets. The market has seen a big increase in troubled leveraged loans, which are floating-rate and subject to interest rate hikes. Investment banks provide these loans but sell off most of the exposure to investors. However, borrowing activity in the market slowed down in 2022 as banks and investors reduced their exposure to credit risk.
Borrowing activity in the leveraged loan market has hit near-record levels in Q1, but this does not indicate a revival of company balance sheets . The market has seen a big increase in troubled leveraged loans, which are floating-rate and subject to interest rate hikes.
Investment banks provide these loans but sell off most of the exposure to investors. However, borrowing activity in the market slowed down in 2022 as banks and investors reduced their exposure to credit risk.
Leveraged Loan Market Borrowing Activity Company Balance Sheets Troubled Loans Interest Rate Hikes Investment Banks Investors Credit Risk
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