Leveraged loans may benefit from investor hunt for yield

Institutional investors in Europe have been combing the high yield bond market this year in search of yield, but many are steering clear of the leveraged loan market. Credit reports on what is deterring them.

burger-king-logo
The buyout of Burger King was financed with a $1.85bn term loan

The continuing trend of credit spread tightening in 2010 may have focused European investors’ attentions on the higher yields to be found in the sub-investment grade universe, but their gaze is still directed largely at high yield bonds, rather than leveraged loans.

While leveraged buyouts of high-profile firms like RBS WorldPay, a payment processing division of RBS, and French frozen food retailer Picard Surgelés received enthusiastic responses from investors, participants remain unconvinced

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