Senior Secured Loans myths busted - 10 reasons you need to take a second look at the asset class
Key takeaways
Safer than you think
Secured by a company’s assets, sitting at the top of the capital structure, and having first right of repayment; Senior Secured Loans are more secure than bonds.
Market misconceptions
Large and highly diverse, the Senior Secured Loans market is worth over US$2.0 trillion and includes diverse companies, many of whom are household names.
Company concerns
Companies are in better shape than expected and seem to be handling the elevated interest rate environment, with leverage declining and interest coverage ratios remaining healthy.
Senior Secured Loans are often overlooked in favour of traditional bonds due to misconceptions about their safety, liquidity, and portfolio fit. However, a closer analysis reveals that these loans offer some unique advantages.
In this paper we debunk ten of the most common myths surrounding Senior Secured Loans and explain why we think they’re a valuable addition to an investor’s portfolio.
