Invesco's Senior Loan ETF Owns Some Of Elon Musk's X Debt Yielding 10% | BKLN

"The Invesco Senior Loan ETF (NYSEARCA:BKLN) generates income by investing in floating-rate senior secured loans made to below-investment-grade companies, typically rated single-B. These loans sit at the top of a borrower's capital structure with first claim on assets in bankruptcy, providing protection versus unsecured bonds or equity. The fund's 6.4% yield comes from interest payments that reset periodically based on prevailing rates, making distributions sensitive to Federal Reserve policy."

"Among BKLN's 175 holdings, one position stands out: X Corp, formerly Twitter. According to Invesco's fact sheet, BKLN holds X Corp senior secured loans with a 10.96% coupon maturing in October 2029, representing 1.89% of the portfolio. This makes it one of the highest-yielding positions, well above the portfolio average. The elevated yield reflects credit risk from Elon Musk's leveraged buyout, which loaded the platform with approximately $13 billion in debt."

"The portfolio's dividend safety depends on interest rate stability, credit quality, and economic conditions. BKLN benefited from Fed rate hikes between 2021 and 2023, with distributions surging from roughly $0.67 per share annually in 2021 to $1.82 in both 2023 and 2024. However, distributions have declined to approximately $1.41 in 2025, reflecting the Fed's pivot toward rate cuts. Polymarket data shows an 86% probability of no rate change at the January 2026 Fed meeting, suggesting distributions may stabilize near current levels rather than decline sharply."

Invesco Senior Loan ETF (BKLN) invests in floating-rate senior secured loans to below-investment-grade companies, producing a 6.4% yield from interest payments that reset with prevailing rates. Loans sit atop borrowers' capital structures, giving first claim on assets in bankruptcy and protection relative to unsecured bonds and equity. Among 175 holdings, X Corp loans yield 10.96%, mature October 2029, and represent 1.89% of the portfolio, reflecting elevated risk from a $13 billion leveraged buyout. Distribution levels rose with Fed hikes through 2023 and fell to about $1.41 in 2025 after rate cuts, while credit risk and economic downturns remain principal threats to income.

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