The sub-prime timebomb is back – this time companies are lighting the fuse

Leveraged loans are ringing alarm bells for regulators who fear a repeat of 2008's mortgage disaster

When an expert in financial risk at one of the world's most powerful private equity outfits tells investors to scale down their exposure to a specific corner of the debt market, it is worth taking notice.

Henry McVey, who sits on the risk committee at KKR, said last week that the leveraged loan market - a $1.3tn (1tn) pile of risky corporate loans - had been on a "great run in recent years" but the firm was now cutting its exposure to the asset class to zero.

Small changes in default rates in the loans or even in expectations of same could cause a meltdown