US leveraged loan packages owned mostly by US insurers, funds and banks, Fed study says

23 July 2019 9:24pm
Most bundled US loans to heavily indebted companies are owned by US insurers, mutual funds, banks and thrifts, according to a Federal Reserve study that provides the first known breakdown of collateralized loan obligation investors.

The study posted last week attempts to identify the locus of growing leveraged-loan risks that have raised concerns among US regulators and lawmakers, as well as international authorities.

This ownership information is “essential for quantifying the full exposures of investors to the leveraged loan market” in the event of an economic downturn, said the Fed’s Emily Liu, an international finance analyst, and Tim Schmidt-Eisenlohr, a PhD economist.