Credit investors have decided that they’re more than willing to fight the Federal Reserve as the central bank vows to keep rates high.
Total returns from leveraged loans and CCC rated junk bonds have rallied strongly this year, outstripping their investment-grade counterparts in recent months as the risk of a severe recession fades. Those gains come even as Fed Chair Jerome Powell has signaled he’s prepared to raise rates even further if he has to.
Strategists from Bank of America Corp. to Pacific Investment Management Co. have written in recent days about the rising likelihood that borrowing costs remain higher as the economy holds up. That’s left the market feeling confident enough to bring several leveraged buyout loans to market in the coming weeks, helping to quench some of the deal supply drought. Deutsche Bank AG, for example, is preparing a $550 million leveraged loan to fund Bain Capital Private Equity’s purchase of Brazilian steakhouse Fogo de Chão.
Junk bond risk premiums are unlikely to widen materially between now and September, in part because of relatively subdued issuance, they wrote. However, spreads “are too tight at these levels due to continuing severe lending standards, deteriorating fundamentals, and a default rate that is likely to rise.”Private equity firm Roark Capital Group expects to borrow nearly $5 billion in a little-known debt market to help permanently fund its investment in US sandwich chain Subway.
UBS Group AG is exploring its first sale of additional tier 1 bonds since its rescue acquisition of collapsed Swiss peer Credit Suisse Group AG.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Three Aces secure double-doubles as Las Vegas rallies to defeat Chicago SkyJackie Young had 24 points and 10 rebounds, Chelsea Gray and A'ja Wilson each added a double-double and the Las Vegas Aces erased a 13-point halftime deficit to defeat the Chicago Sky 94-87 on Thursday night.
Read more »
Leake's club-record fourth punt-return TD rallies Argos past Stampeders 39-31TORONTO — Javon Leake's club-record fourth punt-return touchdown earned the Toronto Argonauts a shootout 39-31 home win over the Calgary Stampeders on Friday night.
Read more »
Leake’s club-record fourth punt-return TD rallies Argos past Stampeders 39-31Javon Leak returns punt 86 yards for winning touchdown as Toronto Argonauts beat Calgary Stampeders 39-31
Read more »
Leake’s club-record fourth punt-return TD rallies Argos past Stampeders 39-31Javon Leake\u0027s club\u002Drecord fourth punt\u002Dreturn TD in the fourth quarter snaps a 31\u002D31 tie and helps Argos avenge their only loss this season
Read more »
Leake's club-record fourth punt-return TD rallies Argos past Stampeders 39-31TORONTO — Javon Leake's club-record fourth punt-return touchdown earned the Toronto Argonauts a shootout 39-31 home win over the Calgary Stampeders on Friday night.
Read more »
Leake's club-record fourth punt-return TD rallies Argos past Stampeders 39-31TORONTO — Javon Leake's club-record fourth punt-return touchdown earned the Toronto Argonauts a shootout 39-31 home win over the Calgary Stampeders on Friday night.
Read more »