In Leveraged Loan Selloff, Most Liquid Debt Gets Hit Hardest

It’s the leveraged loan market’s liquidity paradox.

Selling pressure for leveraged buyout loans has been high all year, amid fears that artificial intelligence will damage or even bankrupt the software companies that account for a fair chunk of the market. But investors often aren’t offloading the riskiest debt — they’re shedding the loans that are easiest to sell, which are often bigger and comparatively safer.