LONDON (Alliance News) - Alcentra European Floating Rate Income Fund Ltd on Tuesday said secondary prices in the loan market have been driven higher by strong demand amid a weak supply of new issues.
Alcentra, which invests in senior secured loans and senior secured bonds issued by European corporates, said the demand side of the loan market was supported by a "number of factors".
The tightening of returns in "so many other asset classes", along with the fact most European loans have zero interest rate "floor", has meant the relative value of the asset class is attracting more buyers, Alcentra said.
Alcentra noted that in the market as a whole the default rate increased over the quarter ended September 30 - to 2.8% in August - but said there was "no suggestion of an increasing medium term trends in defaults" as the percentage of facilities rated CCC+ or worse came in at 1.92%
Shares in Alcentra were untraded on Tuesday, having last traded at 99.50 pence.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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