US leveraged loans are set to outperform junk (high-yield) bonds this month by the largest margin in 2.5 years as some borrowers shift debt financing into loan structures. The move reflects risk-off flows driven by conflict in the Middle East and implies stronger demand and relative performance for floating-rate, senior loan instruments versus high-yield bonds over the near term.
US leveraged loans are set to outperform junk (high-yield) bonds this month by the largest margin in 2.5 years as some borrowers shift debt financing into loan structures. The move reflects risk-off flows driven by conflict in the Middle East and implies stronger demand and relative performance for floating-rate, senior loan instruments versus high-yield bonds over the near term.
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