In this edition of the Secured Loans Insight, David Milward, Head of Secured Loans, and Elissa Johnson, Director of Loans, explain why in a world of uninspiring total return forecasts for most areas of fixed income, loans continue to represent an attractive alternative.
- The liquidity available in the European loan market is comparable to that of the corporate bond equivalents, while the expansion of the European loan market leads to greater choice for loan investors.
- The prevalence of cov-lite loans could lead to increased market volatility. As a consequence, credit selection and liquidity in individual loans becomes more important.
- For 2018, the team expect European loans to deliver total returns of around 3.5-4.5% in euro and 4.0-5.0% in sterling.
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