Search and Recovery (Fourth of a series)

For those of you who sensed last Friday was a special day, but couldn’t put your finger on why, we offer this explanation: On November 16, the annual General Conference on Weights and Measures in Paris voted unanimously to redefine the kilogram.

For decades metrologists have been in a tizzy since Le Grand K, the 19th century platinum/iridium cylinder that set the standard, was found to have fractionally depleted. The new standard is based on Planck’s constant, that relates electricity and weight.

But even this provides no perfect solution. “What we call ‘measurement’ is an estimate,” said one physicist. “The true value, only the universe knows.”

Our own search for true leverage loan value continues this week with a look at risk vs. return metrics. We know that spread per turn of leverage in the overall market has declined over the past several years (see our Chart of the Week). What’s not as clear is how that ratio measures up for first lien loans, particularly in the middle market.