Investors seeking to offset the effects of the Federal Reserve's interest rate hike are pouring money into US loan funds, which is expected to keep a US$208bn refinancing wave rolling as new leveraged loans remain in short supply. Cash is flowing into bank loan mutual funds and exchange-traded funds, which have seen 18 weeks of inflows as investors buy floating-rate debt to secure higher yields and effectively hedge against further interest rate rises. With few new buyout loans to invest in, borrowers have been able to use the demand to slash pricing on existing loans.
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