May 2015
By Jason Rosiak,JP Leasure and Michael Marzouk

What’s Inside

  • Positive technicals, improved risk sentiment, and a snapback in energy credits have been the primary drivers behind bank loans’ strong start in 2015.
  • U.S. corporate profits are continuing to generate free cash flow and provide the ability to service debt. Refinancing risk remains minimal, reducing the risk of a maturity wall or surge in defaults due to lack of access to capital markets.
  • The low absolute yield levels of traditional fixed income combined with stable credit fundamentals paints a favorable relative value picture for loans.

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