Leveraged loans

More opportunistic borrowers may come as investors continue to pour money into U.S. leveraged loan funds, which have seen the longest positive streak since 19 weeks between February and June 2018.

The difference between yields on investment-grade debt and junk bonds doesn’t bode well. It’s a sign that leverage in the system is rising.

Both agencies cited the increasingly sunny economic outlook driven by the reach of COVID-19 vaccination efforts.

Strong growth, continued low-cost borrowing and an oil rally are all contributing to a friendly backdrop for high-yield issuance.

Fewer obligors with troubled loans improved default exposure for managers of broadly syndicated CLOs, and provided deeper cushions for overcollateralization tests.

United follows in the footsteps of recent deals by Michaels Cos. and Triton Water Holdings Inc. that favored loans over bonds.

CoreLogic, known in the real estate industry for its home-price indexes, plans to sell a $4 billion offering to help finance its buyout by Stone Point Capital and Insight Capital.

Many of the biggest whales in collateralized loan obligations are returning to the $900 billion market after spending much of last year on the sidelines, a shift that could make one of Wall Street’s biggest credit machines run even hotter.

Bankruptcy courts saw a greater-than-average number of filings in the first quarter, though a year-on-year decline highlights the impact of cheap cash flowing to troubled borrowers.

For investment firms that profit by buying the debt of troubled companies, it looked like the opportunity of a lifetime: a $1 trillion pile of distressed bonds and loans in the Americas alone as the pandemic sent markets into meltdown last March.

The leveraged loan market has long been the favored financing source for private equity firms looking to juice returns on corporate takeovers and to reward themselves with payouts before selling their acquisitions.

Kovensky, whose departure from the posts is effective April 1, will stay on as a board member at the $17 billion credit management division of Onex Corp. Co-CEO Jason New will become head of credit as part of the transition, while Peter Zaltz will become chief investment officer.

Yellen announced she has revived a hedge fund working group so agencies can “share data, identify risks and work to strengthen our financial system."

The Spanish bank is broadening its lending to speculative-rated borrowers from its traditional focus on high-grade debt, Noya said in an interview. It’s been building a team to get more high-yield mandates in Europe and the U.S.

Don Mullen, founder and chief executive officer of Pretium Partners, says that corporate debt could underperform mortgages this year, with fewer defaults likely for real estate loans and higher recoveries for mortgage-backed instruments.

U.S. companies including Hilton and Avis are so anxious to lock in low borrowing costs now, before inflation fears push yields even higher or close the market altogether, that they’re paying millions of dollars in penalties to refinance debt early.

A PIMCO-sponsored HELOC securitzation, as well as a mortgage-insurance linked transaction, are the latest examples of issuers getting a head start on switching to an expected replacement benchmark for Libor.

The strong showing has prompted managers to bring new deals at favorable terms and refinance and reset existing bonds at cheaper costs, leading market observers to predict a record year for refinancings.

CLO new-issue month-to-date volume is at $8.9 billion, keeping pace with a record $15.8 billion total from February

Firms targeted include Brigade Capital Management, HPS Investment Partners, Symphony Asset Management and Bardin Hill Investment Partners, which all have a CLO business that repackages leveraged loans into bonds of differing risks, sources said.