A $40 Billion Pile of Leveraged Loans Battered by Big Losses… Fed’s Powell Says Planned Bond Buying Isn’t Emergency Stimulus… Investors Are Skeptical

via Bloomberg:

  • Sudden drops reflect growing distaste for shakier issues
  • Energy leads list of losers with $12 billion of loans affected

Barely noticed in a corner of the financial markets, leveraged loans originally worth about $40 billion are staging their own private meltdown.

Loans tied to more than 50 companies have lost at least 10 percentage points of face value in just three months, according to data compiled by Bloomberg. Some have dropped a lot more, with lenders lucky to get back just two-thirds of their investment if they tried to sell.

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Fed’s Powell Says Planned Bond Buying Isn’t Emergency Stimulus

Investors are skeptical.

Fed Takes $31 Billion Securities In Overnight Repo As “Not A QE” Looms

The Fed “will struggle to convince markets that a resumption of Treasury purchases to avoid future money-market turmoil is not another round of quantitative easing”

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