Thomas Finke has more than 30 years of experience working in various capacities within the banking and investment sector. In addition to serving as chairman and CEO of Barings, LLC, Thomas "Tom" Finke is affiliated with the Loan Syndication and Trading Association (LSTA), where he was an active advocate for the leveraged loans and securitized markets.
Typically, a syndicate of commercial or investment banks arranges leveraged loans. Companies with substantial debt burdens that are disqualified from receiving commercial loans are the primary recipients of leveraged loans. The variable interest rates of these loans are higher than regular loans due to their higher risk of default. Leveraged loans are primarily used by organizations for mergers and acquisitions, debt refinancing, or balance sheet recapitalization. Leveraged loans have grown over the years with the Bank for International Settlements, estimating the global value of the market for these loans to be $1.4 trillion in 2019. One of the factors behind the rise of leveraged loans is the encouragement of increased lending by financial authorities with incentives after the 2008 global financial crisis to which many banks responded. The prevailing low-interest rates after the crisis were also a factor, as institutional investors bought these loans, which had been packaged by banks as investment vehicles in the form of Collateralized Loan Obligations (CLO). Consequently, demand for these CLOs grew annually after 2008, with investors looking to profit from rising interest rates.
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AuthorThe Chairman and CEO of Barings LLC , Thomas Finke possesses over 27 years of experience in the investment and banking sectors. Archives
March 2021
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