What's Driving Leveraged Loan Spreads?

Seung Jung Lee and W. Blake Marsh
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W. Blake Marsh: https://www.kansascityfed.org/research-staff/w-blake-marsh/

Macro Bulletin, 2019, issue February 27, 2019, 1-5

Abstract: Syndicated loan spreads have declined since the financial crisis, reducing the cost of credit for corporate borrowers. However, the combination of aggressive loan pricing and weaker credit protections has concerned market observers. We find that syndicated loan spreads have declined across loan and borrower types since the crisis. We also find the decline has been more pronounced for highly leveraged borrowers and has accelerated since 2016, especially for term loans.

Keywords: Corporate borrowers; Syndicated loans (search for similar items in EconPapers)
JEL-codes: A1 (search for similar items in EconPapers)
Date: 2019
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