Investments

Investment firms and hedge funds are increasingly engineering bankruptcy loans and side deals to take control of Chapter 11 reorganizations from the outset, locking in rich rewards for themselves while potentially locking out rivals and lower-ranking creditors with little transparency. The trend is sure to speed up cases, but it also forces judges to make quick decisions that may shortchange some valid claims.

Promising vaccines may not reach the general public fast enough to save a number of struggling companies next year, and workout professionals and distressed investors are expecting smaller private companies will search for cash in 2021. They’re also anticipating that businesses of all sizes may struggle to adjust to changing consumer habits in a post-pandemic world.

The pool of 359 loans also on average carry higher balances (over $900,000) compared to the REIT's earlier pass-through deal this year.

Risk premiums for new transactions, which package and sell leveraged loans into tranches of varying risk and potential return, have tightened to pre-pandemic levels and Wall Street predicts a rise in sales in 2021.

Deals, trends and research in structured finance and asset-backed securities for the week of Nov. 28-Dec. 3

Fannie hasn't completed any credit risk transfers to private investors since the second quarter. Some experts worry the decision — likely spurred by the company’s concerns about a recent capital regulation — could put the mortgage giant on unsteady footing.

DCI, which oversees about $7.5 billion in assets, will become a part of Blackstone’s $135 billion GSO operation, which was recently rechristened Blackstone Credit.

York Capital Management told its investors this week that it was all but getting out of the hedge-fund business to focus on its $8.5 billion in longer-term products.

U.S. bankruptcy filings have slowed nearly to a halt, but they’re expected to pick up next year, led by companies that piled on debt to survive this year’s pandemic and election-related volatility.

The insurance company has previously sponsored three securitizations of reperforming/nonperforming loans since 2017.

The issuer included a record volume of loans in the collateral pool for a solar securitization.

CLO manager Brigade Capital Management has refinanced several tranches of notes to improve the spreads and boost the tranches' ratings.

Company CEO Michael Nierenberg previously commented the real estate investment trust's parts could be worth more than the whole.

Owl Rock Technology Advisors, the same team supporting other Owl Rock CLOs, has launched an inaugural middle market CLO that is continuing the CLO manager's tradition of spreading underwriting responsibilities among a variety of banks.

A spike in coronavirus infections through the U.S. holiday shopping season could trigger more bankruptcies from retailers, even after the biggest surge in Chapter 11 filings on record this year.

Freddie Mac representatives would not comment on the sudden resignation of Brickman. Interim CEO Michael Hutchins has served as Freddie’s executive vice president of investments and capital markets since January 2015.

The casual-dining chain showed improved 3Q performance numbers as it adapted to COVID-19 restrictions with expanded pickup-and-delivery service options.

The fund exceeded its $1 billion target in five months of fundraising despite the lack of in-person meetings, and attracted 55% of the commitments from new investors.

Signs of weakness are showing in commercial real estate where property values have begun falling. The report also said that hedge fund leverage has remained elevated and that life insurers are reaching debt levels not seen since the 2008 financial crisis

After issuance dampened during the presidential election week, corporate bonds and loans are expected to roll out amid a large trove of post-election earnings reports.