For most of 2022, junk-rated loans made to debt-laden companies gave investors stability amid battered credit markets. Now, recession fears are pushing down loan values and cutting returns in the $1.4 trillion leveraged-loan market.
The recent downturn for these loans—which fund mergers or business operations and are sold to big groups of investors—shows how markets’ fixation with surging inflation earlier this year has given way to broader concerns about the economy.
