Some of the posts on Herd Nation reminds me of some of the idiots on here who bragged about the solid economic growth under Dubya ..... right before the Great Recession began.
Leveraged loan growth sparks concerns about the next financial crisis
Former Fed Chair Janet Yellen and other big names in the financial regulatory space are expressing concern over the systemic risk of leveraged loans." Former Fed Chair Janet Yellen and other big names in the financial regulatory space are expressing concern over the systemic risk of leveraged loans.
Lenders will originate leveraged loans to companies looking to finance large transactions, such as a merger. Those lenders then bundle those loans into collateralized loan obligations, which are shopped and traded among investors as securities." Lenders will originate leveraged loans to companies looking to finance large transactions, such as a merger. Those lenders then bundle those loans into collateralized loan obligations, which are shopped and traded among investors as securities.
[...]
An August report from Moody’s said that leveraged finance is also suffering from deteriorating credit quality. Moody’s added that leveraged loan recoveries would likely fall to 61% during the next downturn, compared to the average recovery rate of 77%, citing a growth in the number of lower-rated borrowers and changing preferences for leveraged loans over high-yield bonds.
Yellen recently told the Financial Times that she has seen a “huge deterioration” in lending standards in the $1.3 trillion market for leveraged loans, which has only expanded since the financial crisis.
“If we have a downturn in the economy, there are a lot of firms that will go bankrupt, I think, because of this debt,” Yellen said. “It would probably worsen a downturn.”" “If we have a downturn in the economy, there are a lot of firms that will go bankrupt, I think, because of this debt,” Yellen said. “It would probably worsen a downturn.”
https://finance.yahoo.com/news/leve...l?source=post_page---------------------------
Leveraged loan growth sparks concerns about the next financial crisis
Former Fed Chair Janet Yellen and other big names in the financial regulatory space are expressing concern over the systemic risk of leveraged loans." Former Fed Chair Janet Yellen and other big names in the financial regulatory space are expressing concern over the systemic risk of leveraged loans.
Lenders will originate leveraged loans to companies looking to finance large transactions, such as a merger. Those lenders then bundle those loans into collateralized loan obligations, which are shopped and traded among investors as securities." Lenders will originate leveraged loans to companies looking to finance large transactions, such as a merger. Those lenders then bundle those loans into collateralized loan obligations, which are shopped and traded among investors as securities.
[...]
An August report from Moody’s said that leveraged finance is also suffering from deteriorating credit quality. Moody’s added that leveraged loan recoveries would likely fall to 61% during the next downturn, compared to the average recovery rate of 77%, citing a growth in the number of lower-rated borrowers and changing preferences for leveraged loans over high-yield bonds.
Yellen recently told the Financial Times that she has seen a “huge deterioration” in lending standards in the $1.3 trillion market for leveraged loans, which has only expanded since the financial crisis.
“If we have a downturn in the economy, there are a lot of firms that will go bankrupt, I think, because of this debt,” Yellen said. “It would probably worsen a downturn.”" “If we have a downturn in the economy, there are a lot of firms that will go bankrupt, I think, because of this debt,” Yellen said. “It would probably worsen a downturn.”
https://finance.yahoo.com/news/leve...l?source=post_page---------------------------