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.

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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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