Leveraged-Loan Protections Go From Bad to Worse - Bloomberg

Leveraged-Loan Protections Go From Bad to Worse - Bloomberg



... In a deep dive into the asset class in August, analysts estimated that the average recovery rate on U.S. first-lien loans will probably decline to 61 percent in the next downturn, compared with a 77 percent long-term historical average. Second-lien loans may recoup only 14 percent, well below the 43 percent historical average, the analysts said. Moody’s rates about 29 percent of leveraged-loan issuers B3, compared with just 14 percent a decade ago.