Wall Street Draws Bigger Crowd for Riskier Corporate Loans

Wall Street banks are back to selling second-lien loans, a riskier kind of corporate debt, thanks to demand from a wider swathe of lenders including their private credit rivals and conventional investors.

Second-liens have in recent years been largely provided by private credit firms. But banks are once again selling these transactions to investors including collateralized loan obligations — the biggest buyers of leveraged loans — to slash borrowing costs for issuers.