SFA Research Corner: Leveraged Loans and CLOs – The (Credit) Squeeze is On
Provided by Structured Finance Association
According to the April Senior Loan Officer Opinion Survey on Bank Lending Practices, more banks reported tighter lending standards on commercial and industrial loans in the first quarter of 2023 (46% versus 44.8% in 4Q 2022), increasing cost of loans (from 47.8% to 62.3% of respondents) and charging a premium on riskier loans (50% to 62.9%), levels not seen since 2009. Over the same period, demand for loans weakened further—55.6% reported weaker demand versus 38.8% the quarter before. In this Research Corner we look at the impact of tighter credit on leveraged loans and CLOs. Read More.