Opinion: Junk bonds won’t save everybody from going bust
investors need to remember that speculative-grade companies aren’t immune from going bust, no matter how wide open the debt markets might be.
Leveraged loans
Leveraged lending has avoided pandemic hit. Will that last?
Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.
Oaktree deal crushed a leveraged loan and exposed market’s woes
Money managers bargained away legal rights in exchange for higher returns in an ultra-low interest rate environment. Now they find themselves with precious little protection for their investments just as the pandemic is causing a wave of corporate bankruptcies across the country.
Oaktree deal crushed a leveraged loan and exposed market’s woes
Money managers bargained away legal rights in exchange for higher returns in an ultra-low interest rate environment. Now they find themselves with precious little protection for their investments just as the pandemic is causing a wave of corporate bankruptcies across the country.
S&P: CLO ‘CCC’ buckets fall to lowest post-COVID levels
The ratings agency reported that the average percentage share of triple-C rated loans in CLO portfolios fell below 10% for the first time since March.
By
Glen Fest
Wells: 3Q U.S. CLO issuance tops year-ago levels
The quarterly numbers were boosted by $11.3 billion in new deals last month, the most active month for CLOs since April 2019.
By
Glen Fest
JPMorgan reduces HY/loan default forecast for year-end 2020
Credit research analysts cite a "significant" drop in defaults since the 2Q and improving macroeconomic indicators.
By
Glen Fest
‘Negative’ forward calendar presents challenges for CLO issuers
Spreads and investor demand make conditions ripe for a surge in CLO deals before the election, but a strain on loan supply may complicate the picture.
By
John Hintze
CLOs fight back against hedge fund efforts to siphon value
Brigade Capital Management, Blackstone Group Inc., CIFC Asset Management and Bardin Hill Investment Partners are among the firms looking to change the terms of the CLOs they oversee to put them on better footing when companies they’ve lent to can’t meet their obligations. Collateral managers are often handcuffed in distressed situations due to strict checks on the risks they can take.
Dan Fuss shuns CLOs in his funds as Fed can’t save everything
“The Fed has made it clear that they don’t want a liquidity problem in the Treasury market or the higher-grade corporate market,” Fuss said. “They cannot, unfortunately, underwrite lending in the private markets.”
Private equity using loans for payouts at fastest pace in years
Private equity firms are hitting the U.S. leveraged loan market at the fastest pace in years to fund shareholder payouts with about $8.6 billion of dividend recapitalization deals launched this month.
Delta to borrow $9 billion in largest airline debt deal ever
The prospective payout is so alluring to investors that they’ve placed three times as many orders as bonds and loans available for sale. That allowed Delta to boost the size of the deal from an original $6.5 billion, enough for the company to rule out the need for any federal aid.
Weekly Wrap: TALF funds largely absent from ABS dealmaking
Deals, trends and research in structured finance and asset-backed securities for the week of Sept. 4-10
By
Glen Fest
Weakest junk companies struggle to sell debt, fueling defaults
This year has already seen a glut of corporate failures: there were 177 U.S. bankruptcy filings year-to-date by companies with over $50 million in liabilities, according to data compiled by Bloomberg
‘Fallen angels’ target of trending fixed-income strategy
There’s been a flurry of interest in so-called fallen angels recently as investors seek alternatives to the ultra-low yields on high-grade debt.
Mass offshore oil-servicer failures imperil $30 billion of debt
The industry’s turmoil, including 'strategic options' being pursued by corporate debt obligors like Transocean and Seadrill, has sparked the biggest wave of restructurings since 2017, when the effects of the last oil price downturn reverberated through the industry.
Big U.S. funds join as lenders on $1B Bombardier loan
Alternative lenders like Apollo, Ares and HPS are increasingly providing larger loans to borrowers, and potentially taking away share from the leveraged loan and high-yield bond markets.
Custody banks hurt by absence of commercial lending
While rival banks reported increases in loans and deposits, thanks largely to their participation in the Paycheck Protection Program, State Street and Bank of New York Mellon saw their balance sheets shrink in the second quarter.
Hard hit direct lenders still set to beat rivals, Stepstone says
he report concluded that the industry should fare well compared with its peers, but that loans to mid-sized European companies remained vulnerable to fall-out from Covid-19.
Investors bet against junk bonds at their peril
Investors shouldn’t assume anything about the behavior of speculative-grade debt in this environment.
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