KKR Buys High-Yield Bonds, Sells US Bank Loans as Fed Pauses

KKR is seeing more opportunities in high-yield bonds and is selling some floating-rate debt as the Federal Reserve pauses interest rate hikes.

The firm, which manages $200 billion in credit assets, has been reducing its overweight to floating-rate debt recently, in part by selling US bank loans, Jeremiah Lane, head of US leveraged credit, wrote in a note to clients Tuesday. At the same time, he is finding junk bonds more attractive now than a few months ago, especially in Europe.

“We still have a preference for floating rate over fixed, but we think the allocation should be much ...