Dirty Secret of $1 Trillion Loans Is When You Get Your Money Back

``When regulators were drafting securities laws more than 70 years ago, company loans were excluded because they were mainly private transactions between one bank and one borrower. That's no longer the case, as the debt is mostly syndicated, or distributed, to investors who can then trade the loans among themselves like a bond or a stock... Investors poured an unprecedented $62.9 billion last year into mutual funds that buy the debt, which is mostly speculative-grade, according to Lipper data. They have been lured by yields greater than those of higher-rated securities and interest payments that float above benchmark rates...''