Leveraged loan market left reeling by Brexit

摘要

The European leveraged loan market has entered a period of uncertainty after Britain voted to leave the EU. On Friday loan investors and bankers digested the news of Brexit and tried to work out the knock-on effects on a market that was already suffering from low deal supply and high demand. "Just extraordinary. There will be a period where people need to process it but they will adapt very quickly and start working through the consequences," a loan banker said. "The bulk of the leveraged loan market is based in euros and is senior secured so it should be okay. Undoubtedly there will be equity volatility and valuations might alter, but it's unlikely to affect the bulk of the credit in the market, which should remain relatively stable." He said volatility will likely push yields down on higher-rated credits and lead yield-hungry investors to invest further down the credit spectrum.