Reported 8 months ago
TCW Group Inc.'s CEO Katie Koch predicts a rise in defaults in the $1.7 trillion private credit market, emphasizing that there is no bubble as investors are trading liquidity for yield. Koch anticipates defaults to escalate in the next two years due to lenient covenants and faulty capital structure assumptions about interest rates remaining low. This contrasts Oaktree Capital Management Co-CEO Robert O'Leary's view that private credit is better underwritten compared to the syndicated loan market. O'Leary warns of potential extensive liability management and risks with certain floating rate structures. It is noted that the article discusses insights shared during the Bloomberg Invest conference in New York.
Source: YAHOO