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Should we be afraid of US leveraged loans?
[Faut-il avoir peur des leveraged loans aux États-Unis?]

Author

Listed:
  • Constant Bourdeloux
  • Henri de La Guéronnière
  • Cristina Jude
  • Astrid Labouret

Abstract

Leveraged loans are loans extended to highly indebted companies. Their strong growth in the US over the last five years and their packaging into securitised financial products bear a number of similarities with the subprime market that triggered the 2008 crisis. While the comparison is debatable, the risks posed by the leveraged loan market to financial stability should not be ignored. Les prêts à effet de levier (leveraged loans) sont des prêts accordés à des entreprises très endettées. Le fort dynamisme de ce marché aux États-Unis depuis cinq ans ainsi que l’intégration des leveraged loans à des produits financiers titrisés rappelle, à certains égards, le marché des subprimes ayant déclenché la crise de 2008. Si cette comparaison est discutable, les risques que fait peser ce marché sur la stabilité financière ne sont cependant pas à ignorer.

Suggested Citation

  • Constant Bourdeloux & Henri de La Guéronnière & Cristina Jude & Astrid Labouret, 2019. "Should we be afraid of US leveraged loans? [Faut-il avoir peur des leveraged loans aux États-Unis?]," Eco Notepad (in progress) 119, Banque de France.
    • Handle: RePEc:bfr:econot:119
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