US companies have been piling into the market for convertible bonds as they search for ways to keep their interest costs down, in a rare flurry of activity in otherwise subdued corporate fundraising markets. Issuance of convertible debt climbed by 77 per cent last year to $48bn, according to data from LSEG, making it one
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According to Jonathan Gray, the president of Blackstone, this is a “golden moment” for the private credit asset class. After quoting Gray, the Financial Times’ Robin Wigglesworth noted that “BlackRock’s alternatives investment supremo, Edwin Conway, is ‘confident about (its) future’.1 Apollo’s Marc Rowan sees ‘a good time for the private credit product set’.” Scarcely concealing
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Global corporate defaults surged in December, according to a report by rating agency Moody’s, setting the stage for more missed debt payments ahead as low-grade, highly leveraged businesses grapple with a prolonged period of steep funding costs. Twenty companies rated by Moody’s defaulted on their debt last month, up from four in November, lifting the
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In December 2023, Oaktree’s incoming co-CEOs Armen Panossian (Head of Performing Credit) and Bob O’Leary (Portfolio Manager, Global Opportunities) took part in a webcast for Oaktree clients that explored the state of performing and opportunistic credit markets and what we might expect to see moving forward.  They argued that the current environment for credit investors
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Companies have sold a record $150bn of debt since the start of this month, the busiest opening to the year for more than three decades.

Fed hikes are having a more negative impact on companies with higher leverage, lower coverage ratios, and weaker cash flows. Specifically, the latest data for the third quarter shows that downgrades by S&P of CLO collateral have surpassed upgrades by a ratio of 4:1, see the first chart below. The bottom line is that Fed
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Worries about an economic downturn aren’t enough to dissuade market participants from being bullish on risky debt as their top contrarian trade, according to the latest Bloomberg Markets Live Pulse survey. Despite heavy outflows in 2023 and countless warnings about the health of heavily indebted companies, 52% of 506 respondents see opportunities in high-yield bonds,
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Some of the largest U.S. companies face billions of dollars in additional interest costs and hits to their profit if they refinance their 2024 maturities at current rates, with a third of them lacking the cash to repay upcoming debt. Non-financial companies in the S&P 500 have a combined $107.7 billion in debt coming due
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No fear here… In fact, it’s just the opposite. One way of measuring sentiment is through the relationship between junk bonds and higher quality (investment grade) corporate bonds. The well-worn method of doing this is by looking at the difference in yield between the two, commonly known as the spread. Junk bonds yield more than
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