The Case for Senior Loans

As we begin the fourth quarter, there has been a tremendous amount of investor focus on the uncertainty of the US macroeconomic backdrop and its implication for the senior secured bank loan market, potential defaults rates, and potential sustained volatility. Paramount among those concerns are three key questions:

1) How are underlying issuer able to handle inflation pressures and will they be able to pass along increased costs to their consumers?
2) How will the rising interest rate cycle affect issuers and, more important, their ability to service debt?
3) What effect will a potential recession have on issuers?

This note attempts to answer these questions, along with providing Invesco’s view of the current market


Invesco is a leading independent global investment manager, dedicated to helping insurance investors achieve their financial objectives. We understand insurers have unique investment needs, from optimizing capital efficiency and yield, to managing reserves and reporting. That's why we offer specialized solutions across a broad set of asset classes and vehicles. With $1.6 trillion in total assets under management, and $51.2 billion on behalf of insurance general accounts,* we strive to understand your distinct capital requirements, accounting tax treatment, and risk factors. (*As of December 31, 2021)

Chris Marx
Head of Insurance

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