In Europe “the purchaser base on the loan side is very different from the United States,” said Jon DeSimone, a handling director at Sankaty Advisors LLC. “It’s much more stable and the banks participate in buying brand-new loan offers.”

Default Gap

Fitch Ratings stated defaults in European leveraged loans will remain low this year, with only about 2 percent of the debt anticipated to default in 2016 since of limited exposure to product and energy producers. The ratings company forecast that the exact same step for the United States companies will rise to 2.5 percent by December.US debtors

are taking benefit of this belief, with Keurig on Friday boostingthe size of the euro portion of a $2.95 billion loan to as much as 900 million euros from 250 million euros. The loan belongs to a $6.4 billion financing funding Keurig’s $13.9 billion acquisition by the JAB-led financier group. JAB is a carefully held financial investment company based in Luxembourg that manages the $16 billion fortune of Austria’s Reimann household.

“If you are an European financier, deep space of deals is more limited than the United States,” Sankaty’s DeSimone stated. “You usually see the market responsive to brand-new names even if they are a little an obstacle in the US”

US customers are most likely to increase their dependence on the European loan market, taking advantagebenefiting from signals from the ECB of more support while the Fed raises interest rates, according to Stuart Perry, of BNP Paribas SA’s loan distribute desk.

“With the ECB expected to continue to purchase bonds, we would expect investors to remain to seek to high yield for return,” stated Perry. “This indicates that the European loan market must remain to diverge from United States loan market.”