European leveraged loans are an attractive component to diversify a high yield corporate credit portfolio. As floating rate instruments, leveraged loans significantly outperformed high yield bonds in 2021-2022, yet wider credit spreads and higher base rates are still providing an attractive entry point into the asset class. Our illustrative scenario analysis further points to continued strong performance over the next few years, even with very pessimistic default assumptions.
European leveraged loans: Compelling entry point in an attractive asset class
31.1.2023