Forced selling has wrought havoc in a swathe of asset classes this year and leveraged loans, the debt used to finance private equity-backed acquisitions, has proved no exception.
The S&P/LSTA leveraged loan index suffered its worst month ever in October, losing 13.2 per cent and cementing a year-to-date decline of 20.2 per cent. The average loan is trading at 71 per cent of face value, far below the trough of 87 per cent seen in the 2002/03 bear market.
