Loans Yield More than Junk Bonds

Loan yields jump on concerns about slow growth, Fed’s pledge to keep rates low.

Loans are yielding more than high-yield bonds for the first time amid recent “gyrations” in the credit market, according to Bank of America Corp.

Leveraged loans are yielding 9 percent after adjusting for fixed-rate differentials and floors on the London interbank offered rate, compared with 8.7 percent for U.S. high-yield bonds, Oleg Melentyev and Christopher Hays, New York-based Bank of America strategists, wrote in a Sept. 2 research report.

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