Mandatum AM says tighter spreads make European leveraged loans market more demanding for credit selection

• Mandatum Asset Management flagged tighter spreads in European leveraged loans, boosting the need for stricter credit selection.
• Yields remain above 7%, supported by floating-rate coupons, while dispersion has widened between stronger issuers and weaker credits.
• The market showed relative resilience in 2022, then outperformed high-yield bonds in 2023-2024, helped by lower rate sensitivity.
• CCC credits are about 6% of the market, with recovery outcomes described as close to a 50/50 split.
• Traditional default rates are about 1% on average for 2024-2026, while broader credit event indicators sit near 2% since 2025.

Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Mandatum Asset Management Oy published the original content used to generate this news brief on September 17, 2026, and is solely responsible for the information contained therein.