For many of 2022, junk-rated loans made to debt-laden corporations gave buyers stability amid battered credit markets. Now, recession fears are pushing down mortgage values and slicing returns within the $1.4 trillion leveraged-loan market.
The current downturn for these loans—which fund mergers or enterprise operations and are offered to large teams of buyers—reveals how markets’ fixation with surging inflation earlier this yr has given technique to broader concerns concerning the financial system.
