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United States

20 Jan 2022

Leveraged Loan Prices Surge to 15-Year High as Central Banks Turn Hawkish

The Index Today

Leveraged loans in the U.S. have spiked to their highest in 15 years, informed by world central banks taking a more hawkish approach to counter pandemic-induced inflation.

These loans are typically taken out by cash-strapped companies looking to pay off their substantial debts. Leveraged loans have a floating interest rate which make them more appealing to investors as central banks across the world turn their attention towards enforcing rate hikes.

According to Refinitiv Lipper, investor influx have risen to a nine-year high at $1.84 billion towards the end of the week of January 12th.

This comes as the U.S. Federal Reserve gears up to implement the first of the rate hikes proposed for this year as early as March.

©Photo: Financial Times

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