Like many of his peers in the European leveraged loan market, Don Procter, chief investment officer of London-based investment management firm New Amsterdam Capital Management (NAC), believes that the unprecedented growth in the asset class should be viewed with some caution.

The large volume of loan issuance and the concurrent rise in the number of investors participating in the loan market in Europe have resulted in tighter spreads and have put pressure on both leverage ratios and deal structure, Procter said. As such, average credit quality has declined, and dedicated investors must be more careful when making their choices.

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