Investors in European and US loan markets will enter their offices with great trepidation on Monday morning after a flood of forced selling by hedge funds and other leveraged investors sent prices crashing last week.

In Europe, the average price of the most commonly traded large leveraged loans to companies such as Alliance Boots, Ineos, NTL and United Biscuits saw its biggest weekly drop, according to S&P LCD, the market information service, and Markit Group.