Thomas McDonnell, Managing Director, Barings and Tony Grigonis, Head of Intermediary Wealth Sales, MassMutual Investments make the case for senior loans in today’s market environment.
Senior secured loans, sit at the top of the borrower’s capital structure, are asset-backed, and typically have first priority claim in the event of a default. This broadly-syndicated high-yield asset class typically offers a floating rate base and fixed credit spread. In a rising rate environment, an allocation to senior loans has the potential to mitigate interest rate and duration risk, while enhancing total portfolio returns. McDonnell also weighs in on the overall health of the credit market, allocation considerations and risks.
The MassMutual Global Floating Rate Fund, sub-advised by Barings, provides diversified exposure to the senior secured loan asset class and aims to deliver strong absolute returns driven by current income and capital appreciation. The actively managed strategy draws from Barings’ decades of experience in the senior loan and high yield credit space, and offers a differentiated portfolio across industries, issuers, and geographies, while maintaining a high-conviction approach.
To learn more, register & watch MassMutual Investments’ webcast: Volatility and Rate Hike Concerns? Consider Senior Secured Loans.
With the prospects of further rate hikes and volatility testing financial markets, senior secured loans are worth investor consideration for their potential to offer protection against both credit and interest rate risk. In this discussion, we will outline some of the notable characteristics of the broadly syndicated loan market and why this asset class is worth consideration in the current environment. Additionally, we will discuss why we believe that a global approach investing across the North American and European loan markets makes sense when investing in this asset class.