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By Thierry De Vergnes, Head of Debt Investments, Lyxor Asset Management
It won’t have escaped anyone’s attention that the market for high yield debt has undergone a tremendous transformation since 2008. As the recovery wave slowly rippled through debt instruments and compressed spreads in its wake, investors have migrated ever farther from their natural habitat. First into high grade credit, then into high yield bonds, and eventually into senior loans. Investors who were once invested in senior loans via CLOs (leveraged securitisation vehicles) are now back in the loan business – this time essentially via unlevered loan funds. Far from being the bold adventure of imprudent investors, this is the logical result of the transformation of a market that has been slowly...
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