UPDATE 1: RLPC-Fed casts eye on high prices in leveraged loans

NEW YORK, June 2 (RLPC) - Inflows into the leveraged loan market have contributed to rising secondary prices and a decline in the number of loans with protective covenants, causing the Federal Reserve to keep a close eye on the asset class.

Demand from investors in search of higher yielding paper has allowed issuers to borrow at increasingly attractive terms in recent months and the Fed is prepared to "speak out forcefully" if "pressures ... continue to build," Fed Reserve Vice Chair Janet Yellen said in a speech Wednesday at a conference in Japan.

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