Leveraged Finance European Bank Loans

Investment Objective

 PGIM Fixed Income's European Bank Loan Strategy seeks to provide +150 bps in excess return over the Credit Suisse Western European Leveraged Loan Index (EUR hedged) or a similar market index.1

1 There is no guarantee that this objective will be met.

Available Vehicles

Available Vehicles

Separate Account

Investment Philosophy

The investment philosophy of PGIM Fixed Income’s European Bank Loan strategy is to build balanced and relatively well diversified portfolios of leveraged loans and 1st lien secured bonds in companies with robust operating characteristics and defensible market positions. We believe we can be more selective in choosing our investments due to our broader investable universe, and place a greater emphasis on bottom-up analysis, including ESG risk analysis, to identify fundamentally strong credits that offer good relative value for their respective credit quality. Meanwhile superior liquidity and more granularity in the portfolios we manage allow us to exit investments when we believe the fundamental outlook for an issuer has begun to deteriorate. We believe this philosophy has generally allowed us to manage portfolios to higher ratings and/or higher spreads than our peers, often without sacrificing liquidity.

Investment Process

PGIM Fixed Income employs a disciplined, three-step investment process to manage European Bank Loan Portfolios:

  1. Leverage firm resources to define the current global backdrop and risk appetite

  2. Security selection, portfolio construction, risk budgeting

    Macroeconomic & Fundamental Research

    Market strategists provide continual macroeconomic assessment

    Research team evaluates all issuers in the universe. Focus on downside protection:

    • Asset Quality
    • Capital Structure
    • Covenants
    Arrow Right

    Relative Value Analysis

    Portfolio managers evaluate and maximize relative value among approved universe:

    • Choose regions & select countries that reflect macro perspective
    • Choose fundamentally strong credits with best relative value
    Arrow Right

    Portfolio Construction

    Credit Analysts, portfolio managers, and risk managers provide continuous oversite:

    • Actively monitor all credits
    • Closely monitor industry and issuer exposures
  3. A rigorous process is employed to monitor risk at all levels

Senior Portfolio Manager

 

Jonathan Butler

Head of European Leveraged Finance