Of all the changes in the sub-investment grade capital markets over the last decade, the blurring of the boundary between loans and bonds might have the most lasting impact.
It has spurred consistent growth in multi-asset strategy funds on the buyside, through which leveraged loans and high-yield bonds are managed together in a single strategy. This has spurred demand for both. The traditionally very different instruments are increasingly being treated as one and the same.
To some degree, this has come about because of the convergence in investor protection that has taken place over 10 years of quantitative easing and a relentless search for yield.
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