(Bloomberg) -- The turmoil in global markets this past week is causing private credit funds to question whether they should reconsider the ever-tighter loan ...
-- The turmoil in global markets this past week is causing private credit funds to question whether they should reconsider the ever-tighter loan margins they’re demanding.Industry stalwarts such as Ares Management Corp. and Blackstone Inc. have been charging less for private credit for most of this year, according to data compiled by Bloomberg News , as they try to snatch business away from the syndicated loan market.
“If the data starts to present a clearer hard landing expectation,” then “we are going to have the opportunity to widen credit spreads,” said Andrew Davies, head of CVC Credit in London, but “we probably need a longer period of volatility to support a significant move wider.” Bonds broadly gained after a weaker-than-expected jobs report on Aug. 2 raised concerns that the economy was slowing at a faster rate than previously understood, and the Federal Reserve might have to be more aggressive about cutting rates.
The change in tone was obvious on Monday, when SeaWorld Parks & Entertainment Inc. shelved its planned refinancing of a $1.55 billion term loan, while SBA Communications Corp. postponed the repricing of a $2.3 billion term loan. On Tuesday a $3.65 billion package for Focus Financial Partners was delayed, and market participants expect more lower rated deals will be pulled. In Europe, three days this week saw no bond sales.
Creditors are currently running a sales process for Hotel Bauer after seizing the Venetian landmark from the ruins of Rene Benko’s Signa empire. Elsewhere, Carlyle Group took over London Southend Airport following a dispute over an alleged breach of the terms of a pandemic-era rescue package. And Oaktree Capital Management won control of Italian football club FC Internazionale Milano after its Chinese owner defaulted on a loan.
BlueBay Asset Management’s head of European high-yield, Justin Jewell, has left the firm and will join Ninety One Asset Management, according to spokespeople at the two companies.
Basis Points Global Markets Ares Management Corp. Percentage Point Blackstone Inc. Private Credit Bloomberg Seaworld Parks & Entertainment Inc. Secured Overnight Financing Rate Focus Financial Partners David Golub Corporate Bonds
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