BGFLX

Like corporate bonds, senior loans are subject to the credit risk of the indebted company and economic slowdowns may put pressure on corporate cash flows and/or profitability. Declining cash flows may reduce the ability of a company to service its debt and, incidentally, may push its market price lower. The lower credit ratings of senior loans by that senior loans are more highly leveraged than their investment-grade counterparts or may provide lower recovery rates in the event of a default. This means they may be more vulnerable in a recession, however, managers may seek to mitigate the credit risk associated with below investment-grade debt by careful credit analysis of the borrower and an assessment of the collateral attached to the loan. Although our investment process is bottom-up (focusing on the fundamental risk characteristics of a single issuer), we are influenced by developments in the broader economic and credit cycles that might impact specific industries or the senior loan..