Shadow US banks cool on riskier leveraged loans

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Shadow US lenders jettisoned riskier syndicated loans in 2021, although subprime exposures continued to retain a far larger ebook share than earlier than the pandemic, information from federal businesses reveals.

As of end-September, non-bank lenders – together with hedge funds, pension funds, insurers and securitisation swimming pools – held $308 billion of US syndicated loans tagged by supervisors as ‘non-pass’, which means they’d subpar threat traits or had been unlikely to be repaid in full.

 

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