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The amount of distressed debt in the U.S. has quadrupled in less than a week to nearly $1 trillion, reaching levels not seen since 2008 as the collapse of oil prices and fallout from the coronavirus shutters entire industries across the globe.
Dramatic Fed intervention may steady some markets, but unless something changes — and, judging by the last two weeks, it very well could — the central bank won’t be there to save fallen angels. Which brave investors will step up?
Red flags and warning signs from February should have prompted investors to make “all the wise decisions" at that time, says Ville Talasmaki of Finnish financial group Sampo Oyj.
One option could be issuing an announcement that makes clear regulators won’t likely object to risky funding arrangements that they’ve previously frowned upon, said the person who requested anonymity because the discussions might not lead to any actions.
Oaktree Capital Management LLC is planning a new distressed debt fund as recent credit market turmoil throws up investment opportunities.
While collapsing market prices do not present immediate worries for CLO managers, the prospect of future downgrades and defaults becomes more problematic.
Prices for major term loans issued by operators such as Marriott International, Hilton Worldwide and Caesars Entertainment have fallen in recent weeks as investors grow worried about the impact of the COVID-19 outbreak on global tourist and business travel.
Banks may be protected from a direct hit, but they have invested in vehicles that include such loans, potentially exposing them to defaults.
If JPMorgan, Credit Suisse and Macquarie Group aren’t able to find enough takers of bonds and loans funding El Dorado Resorts' acquisition of Caesar's Entertainment, they may have little choice but to offer the debt at a steep discount.
Asset manager PGIM Inc. is looking to at least triple its investments in the growing direct lending market where it wants to compete with banks to fund mid-size companies outside of the buyout space.
Ample access to cash and debt, along with strong diversification strategies built into investment portfolios, will help asset managers and junk-rated corporate borrowers absorb any near-term substantial economic headwinds, according to Fitch Ratings.
ALM 2020 includes a $1.375 billion Class A1 series of notes that have a three-month Libor spread of 108 basis points, well within the average primary AAA spread of 133 basis points over Libor.
A leading law firm in The Netherlands is mulling an appeal against the Dutch authorities’ decision to charge VAT on the management fees of collateralized loan obligations.
LibreMax Capital is launching its first ESG-compliant deal through its CLO firm Trimaran Advisors LLC.
A proposed change could resurrect bond buckets, but loan industry observers also point to "covered fund" changes shielding loans from a potentially disruptive court decision.
CBAM Partners co-founder Don Young retells the firm's fast rise into one of the larger CLO managers, and discusses the state of the market.
Regulators are alarmed about banks' rising exposure to high-risk corporate credits and want more data on how they would perform in a recession.
Impact investing has long centered on environmental and social purpose, but governance could make huge strides as an ESG consideration in 2020.
The BSL CLO will have two-year noncall and five-year reinvestment periods, and brings Seix' total CLO AUM to $3.8 billion.
Rising leverage levels and prevalence of cov-lite loans raise concerns despite ongoing macroeconomic growth signs.
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