Leveraged loans are generating their biggest losses of the year as investors pull back from even the safest debt in a company's capital structure on concern that Europe's financial crisis will spark a global slowdown that diminishes the creditworthiness of borrowers.

Syndicated loans of speculative-grade borrowers lost 1.22 percent last month, the most since November, snapping the longest rally since the eight months ended February 2011, according to the Standard & Poor's/LSTA U.S. Leveraged 100 Loan index. The last time investors lost money in the debt of companies such as Energy Future Holdings Corp. was in November, when the market fell 1.34 percent.

At the same time that Spain seeks a bailout for its banks and speculation increases that Greece will leave the 17-member euro, Federal Reserve data released last week showed corporate profits are climbing at the slowest pace since they dropped in the final quarter of 2008. Growth in commercial and industrial lending is slowing as banks retrench, Fed data also show.