Economic gloom ‘won’t stop cov-lite lending’
Investors say borrowers will continue to enjoy looser terms, despite projected rise in defaults
The IMF has forecast that global growth will fall to 2.7% next year – its lowest level since the financial crisis – and rating agencies warn that default rates on leveraged loans are set to double. Yet despite the economic backdrop, investors still believe that covenant-lite syndicated loans will remain standard.
Daniel Ko, principal and portfolio manager at Eagle Point Credit Management, is among those who think that all but the weakest borrowers in the broadly syndicated loan (BSL) market
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