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2019 Sector Teams' Outlook: Bank Loans

We expect the formation of collateralized loan obligations to remain a positive technical driver for loan demand through 2019.

We believe that as the Federal Reserve raises rates, future loans will have higher coupons, which the market should anticipate.

We have a positive outlook on corporate fundamentals. This, coupled with the low volume of loans maturing through 2020 and high rates of refinancing, should help keep default rates below historic averages.

At the end of 2018, loans in our portfolios averaged historically robust interest coverage ratios.

Bank-Loan-Maturities

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This blog post is provided for informational purposes only and should not be construed as investment advice. Any opinions or forecasts contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Loomis, Sayles & Company, L.P. This information is subject to change at any time without notice.

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About the Authors

Loomis Sayles analysts are career professionals who offer deep knowledge and experience in a diversity of global asset classes and market sectors. These dedicated experts provide the insight essential to supporting our portfolio management teams across a wide range of investment strategies.

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