Investors bet against junk bonds at their peril
Investors shouldn’t assume anything about the behavior of speculative-grade debt in this environment.
Commercial lending
SoFi applies to open a national bank
If it’s approved, the charter is expected to lower the fintech’s cost of funds and allow for more product offerings. It comes nearly three years after SoFi pulled the plug on an earlier effort to open an industrial bank.
Apollo’s debt-lawsuit defeat to reshape Wall Street risk models
If creditors can now be pushed down the repayment pecking order without notice and have no recourse to fight back, they will be forced to reassess risk – and potentially demand higher interest rates – when granting loans and buying certain kinds of bonds.
Credit markets: bankruptcies pile up while leveraged-loan pipeline slows
Retailers and energy firms filed for bankruptcy protection in record numbers in the first half of 2020. Meanwhile, the volume of leveraged loans mandated but yet to launch is down 55% from the end of May.
Fed to start buying loan stakes in coronavirus rescue program
Banks participating in the Main Street Lending Program were able to register for and offer credit to businesses last month, but the Federal Reserve said Monday it was set to make the effort fully operational.
House clears extension of PPP to August
The Senate had passed the bill Tuesday, shortly before the Small Business Administration was to stop accepting new loan applications.
Loan investors sign on for Chesapeake’s Chapter 11 plans
Stakeholders in a $1.5B term loan (which include CLO managers) overwhelmingly approved the failed energy company's voluntary bankruptcy plan, providing them a 76% pro-rata share of new common stock in the company after it emerges from bankruptcy.
By
Glen Fest
Credit firms race to hire distress experts ahead of more turmoil
Money managers including Owl Rock Partners, Pretium and PGIM are racing to add workers with restructuring and bankruptcy experience as they take in record amounts of cash to buy cheap assets battered by the economic fallout of the coronavirus pandemic.
Hedge funds exploit CLO weakness laid bare by corporate distress
Restricted from taking on distressed debt or debtor-in-possession loans, CLO managers are being left out of opportunities in coronavirus-related debt restructurings. "It's frustrating," says one manager. "We are supposed to be the bully, not the one being pushed around.”
Treasury, SBA to disclose identities of large PPP borrowers
The agencies said late Friday that they will provide information on small businesses that received $150,000 or more from the Paycheck Protection Program.
Lenders, lawmakers push for PPP extension despite tepid demand
Activity in the Paycheck Protection Program has waned, but some argue that many small businesses, especially those owned by minorities, will miss out if the June 30 application deadline isn't extended.
Santander Group invests $40M in consumer lender Upgrade
Other challenger banks focused on personal loans have struggled since the onset of the coronavirus pandemic.
Zandi: Corporate debt load is worrisome, but not systemic
Leveraged loans and collateralized loan obligations do not represent an "existential" threat to the global economy or to the U.S. banking system, as some recent highly charged reports have suggested.
By
Glen Fest
Wall Street puts guardrails on LBO deals after crisis markdowns
The leveraged loan market, long favored by private equity firms to fund LBOs, has lagged. The largest buyers of the debt – vehicles known as collateralized loan obligations – are not purchasing as much as they used to as they deal with the wave of downgrades that has hit many of the companies they already hold.
California tables ‘mini-CFPB’ idea — for now
A budget item establishing a new agency to protect consumers from predatory lenders has been put on hold as state officials deal with the coronavirus response and other priorities. But it could be revived in legislative talks later this summer.
Report: Kabbage lending hiatus prompts accelerated ABS paydown
The online small-business lender’s temporary halt to loan originations contributed to a breach of a minimum asset level for its Series 2019-1 collateral pool, according to Kroll.
By
Glen Fest
The pandemic’s CRE domino effect
As revenue-starved retailers fall further behind on rent payments, landlords' cash flow will be strained, and defaults on commercial real estate loans could rise.
Delay of Fed’s Main Street program hasn’t hurt businesses, Powell says
The central bank is only now nearing the launch of the credit facilities after the effort was announced in April. But Chairman Jerome Powell said loans have been available through other means.
!["Lots and lots of companies are getting financed, the banks are lending, the markets are open [and] you have a much easier lending climate certainly than we had in February and March,” said Fed Chairman Jerome Powell.](https://vip.arizent.com/ab/wp-content/uploads/sites/4/2020/06/powell-jerome-bl-061020.jpg?w=365)
Amazon, Goldman will offer small-business lines of credit
The venture with Goldman Sachs represents the first time Amazon has let a third party control the underwriting process of one of its financing offerings.
Fed expands middle-market loan relief to attract more interest
The central bank will increase support for credit issued through the Main Street Lending Program while providing midsize firms with more flexibility on the amounts they receive.
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