It was a flashpoint in the world of distressed investing: Sanjeev Gupta’s infamous metals empire was falling apart as Greensill Capital imploded.
As turnaround specialists sought to grab debt of one of his key assets on the cheap, a single U.S private-equity firm swooped in to buy up the lion’s share — at full price.
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Morgan Stanley this month has struggled to attract demand for a $301 million commercial real estate bond tied to a data center in Kansas City.
In credit, a risk-taking ebullience has taken hold. The lowest-rated traded company debt is outgunning safer assets.
In the US, some loans include blacklists, which name specific funds that aren't allowed to buy the debt. Those restrictions have come into focus recently.
Distressed debt in the US alone jumped more than 300% in 12 months, high-yield issuance is much more challenging in Europe and leverage ratios have reached a record by some measures.
The strains are largely linked to aggressive rate increases by the Federal Reserve and central banks around the world, which have dramatically changed the landscape for lending.
