Leveraged Loan Market Shows Near-All-Time High Dispersion: Sinjin Bowron
Sinjin Bowron of Beach Point Capital Management discusses the leveraged loan market on Bloomberg Real Yield, highlighting that dispersion in risk and reward is near an all-time high. He notes that further Federal Reserve rate hikes could worsen this divergence, particularly affecting lower-rated borrowers with higher leverage who may struggle to refinance or extend maturities at favorable terms. Bowron explains how companies refinancing loans from a low-rate environment now face higher borrowing costs and are exploring alternatives like private credit. However, he mentions that the pressure release provided by private credit has diminished somewhat in recent years. Some loan issuers have begun shifting to high-yield markets or extending maturities while reducing exposure.
Topics: credit dispersion leveraged loans private credit refinancing challenges