Risk appetite has fallen for a third successive month in August … down to a one-year low of -10% in August from -5% in July pic.twitter.com/s9jGWi2DOw
— Win Smart, CFA (@WinfieldSmart) August 14, 2024
Investors increased allocation to bonds, cash, and healthcare … and reduced allocation to equities, Japan, Eurozone, and materials pic.twitter.com/z1TKlEbaF2
— Win Smart, CFA (@WinfieldSmart) August 14, 2024
https://twitter.com/dailychartbook/status/1823678126570004698
US junk debt investors cautious of leveraged loans as economy slows
Aug 14 (Reuters) – Leveraged loan deals are expected to pick back up after a stabilization in markets over the past week, although some investors say they are cautious about junk-rated loans if the economy weakens.
Borrowers pulled back on leveraged loan deals last week, following disappointing jobs data on Aug. 1 and Aug. 2 that raised forecasts for aggressive interest rate cuts and spurred concerns about lower-rated debt.
A total of six leveraged loans worth $3.3 billion sold last week, which falls well short of the $10 billion weekly average this year and is the worst week for issuance outside the holiday-shortened first week of July, according to PitchBook LCD data.
One junk-rated loan deal sold on Monday, airline JetBlue Airways’ (JBLU.O), opens new tab five-year term loan, according to PitchBook LCD. JetBlue originally sought a $1.25 billion loan, but downsized it to $750 million and upsized its bond offering to $2 billion from $1.5 billion, according to Informa Global Markets. JetBlue did not immediately respond to a request for comment.