The Case for Senior Secured Loans: Q3 2025

Investors are increasingly reassessing the health and positioning of the bank loan asset class amid a backdrop of macroeconomic uncertainty and headline-driven volatility. Recent events such as the high-profile default of First Brands have amplified concerns around credit risk and the resilience of corporate issuers. While these developments have sparked debate, we believe these reflect idiosyncratic issues rather than systematic risk. Against this backdrop, three key questions have emerged:

1) How are underlying bank loan issuers performing in the current market?

2) What is the impact of falling interest rates on loan returns?

3) What is the outlook for the loan asset class?

This piece provides our view on the current market environment and attempts to answer these critical questions.