CDOs/CLOs

A New York judge last week dismissed a claim that a leveraged loan JPMorgan Chase & Co. and other Wall Street banks sold in 2014 could be considered a security and, as such, be subject to the same disclosure requirements as stock and bond offerings.

In a report issued Tuesday, the ratings agency notes that 1,287 companies as of April 28 faced prospects of potential debt and issuer downgrades, impacted by the coronavirus outbreak and a virtual shutdown of the global economy this spring.

4L Holdings Corp. is seeking a cash infusion that would help it outlast the economic pain the coronavirus outbreak has had on its business. That’s sparking the ire of CLO managers who could see their stakes in the firm wiped away.

Unlike public equities and even high-yield bonds, funds focused on CLO equity show little evidence of rebounding anytime soon from steep losses in total value.

Business development companies, the most visible pocket of the $800 billion private credit market, face more dividend cuts and possibly even restructurings later this year after the Covid-19 pandemic has bruised their portfolios.

The Federal Reserve's unprecedented scale of intervention sparked an immediate surge in demand for both investment-grade and junk bonds. Now that the program has started buying, it’s unclear what happens when – and if – the funding runs out.

Credit firm HPS Investment Partners has committed nearly $5 billion to private debt opportunities since mid-March amid volatility caused by the Covid-19 pandemic.

J.C. Penney Co., the department-store chain that’s been negotiating with creditors on a plan to restructure in bankruptcy court, made good on a missing loan payment and said it’s still considering solutions to its crushing debt load.

If a business isn’t prepared for situations like the Covid-19 outbreak that’s rattled markets, it’s often too late once such a crisis hits, Bruce Flatt said in a letter to shareholders Thursday.

But market observers remain unsure whether changes to the $100 billion Term Asset-Backed Securities Loan Facility program will boost CLO investor demand or new-deal issuance, given key restrictions that remain in place.