Now Isn't the Time to Panic About Levered Loans, says PGIM's Peters

The video discusses the state of corporate balance sheets, highlighting their strength due to high cash reserves and low borrowing rates. It explores the financialization of retail, with a focus on leveraged loans and ETFs. The discussion covers market access, risks, and the current attractiveness of leveraged loans, emphasizing the improved risk-reward ratio for investors.

What is the current state of corporate balance sheets according to the discussion?

• They are worse than in 2015.

• They are similar to the state in 2006.

• They are in good shape with cash levels near record highs.

• They are in poor shape with low cash reserves.

What has been a significant trend in retail investment over the past few years?

• A move away from bonds to real estate.

• A decline in retail investment overall.

• Increased investment in leveraged loans due to fear of rising rates.

• A shift from ETFs to traditional stocks.

What is a key feature of leveraged loans that has been problematic?

• They have a fixed interest rate.

• They are often called away at par.

• They are only available to institutional investors.

• They have no maturity date.

Why are leveraged loans considered more attractive now?

• They have become more liquid.

• They are now backed by government guarantees.

• They have higher interest rates than before.

• They are trading at a discount, offering better risk-reward.

What was a major cause of the price drop in the leveraged loan index in 2016?

• A rise in interest rates.

• A decrease in retail investment.

• Defaults in the energy sector.

• A global economic recession.