Leveraged Loan Demand Strong Despite Weakening Borrowers and Increasing Defaults
DBRS, Inc. (DBRS Morningstar) published a commentary analyzing the sources of demand for leveraged loans, as well as the impact of the Coronavirus Disease (COVID-19) and related economic fallout on the highly leveraged borrowers that are utilizing this source of funding. The prolonged period of very low interest rates combined with a benign credit environment have contributed to significant demand for riskier, higher yielding investment products over the past decade. This demand is very evident in the growth of leveraged lending, which has reached record levels.
DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.
Together, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 2,600 issuers and 54,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. For more details visit us at dbrs.com.
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