Watch leveraged loans as canary in credit coal mine, traders say

Investors watch leveraged loans for the first signs that aggressive central-bank rate hikes are starting to hit companies hard. They also brace for more FTX-like blowouts in the private equity industry and expect investment grade to do well next year.
Traders work on the floor of the New York Stock Exchange during morning tradingon December 02, 2022 in New York City. | Photo: Michael M. Santiago/AFP/Ritzau Scanpix
Traders work on the floor of the New York Stock Exchange during morning tradingon December 02, 2022 in New York City. | Photo: Michael M. Santiago/AFP/Ritzau Scanpix
By Olivia Raimonde and Sebastian Boyd, Bloomberg

A majority of 291 respondents to the latest MLIV Pulse survey said leveraged loans would be the canary in the coal mine to indicate that corporate credit quality is getting worse.

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