JunkBondInvestor
Credit analyst focused on high yield bonds, leveraged loans, and distressed/special situations with frequent deal/document analysis.
LP Secondaries Plunge Below Par as GP Continuations Surge
7% of LP-led secondaries in 2H’25 sold at par. Over a quarter sold < 80 cents. Meanwhile GP-led CVs are booming. Different structure, same problem The traditional exit isn’t there at the price the GP underwrote.
S&P Threatens Downgrade Unless Funds Cap Redemptions
S&P to Cliffwater: if you keep honoring redemptions above 5%, we might downgrade you. So the choice is: gate your investors and keep your rating, or pay your investors and lose it. The product design is now working against itself.
Senior Deals Earn Fees, Then Face Distressed Capital
The 2024 SteerCo playbook: Go super-senior, get fees, get paid. The 2026 SteerCo playbook: Go super-senior, get fees, get stuck with new money that’s now also distressed.
Forecasts Keep Rising, Yet Critics Call Them Irresponsible
Every month someone publishes a higher default forecast. > Fitch: 5.8% actual > Morgan Stanley: 8% > UBS: 15% worst case Every month someone in the industry calls it irresponsible.
Banks Shifted $300B Risk to Private Credit Funds
$300B in bank loans to private credit funds, BDCs, and CLOs. "Private credit moved risk out of the banking system" was always the pitch. The banks just lent to the funds instead of the borrowers.
Coercive A&E Dominates $38B Software Maturity Market
The software maturity wall isn't a secret. Everyone has this chart. $38B in 2028. Mostly B and below. These aren't getting refinanced at par. They're getting extended. The only question is whether the A&E is consensual or coercive. And if the last...
OBDC's 25% NAV Discount Highlights Stale Marks
Blue Owl says the marks are real. Every sell-side analyst has a Buy. Yet $OBDC trades at a 25% discount to NAV. Finally had a chance to go through the portfolio. Found exactly what you'd expect: stale marks, understated software exposure,...
Cliffwater Blames Sentiment Amid $33B Fund Redemptions
Another one. Cliffwater facing 7%+ redemptions on their $33B fund. Their response: “Sentiment is driving the selloff more than fundamentals.” That’s what they all say. Right before the gates go up.
AI Giant Issues $25B Debt to Boost Stock
The AI poster child is issuing $25B in debt to buy back its own stock. Not to invest in AI. Not to acquire capabilities. To support the share price. That's the strategy. $CRM
Non‑traded BDC Redemptions Surge Past 5% Limit, Eye Retirement Access
This is the chart the 401k conversation should start with. Non-traded BDC redemption requests blowing past the 5% redemption limit. Trajectory straight up. And the industry's next move is to open these products to retirement accounts.
BlackRock Wipes Private Credit Loans to Zero in Three Months
Well well well... BlackRock marked a private credit loan at 100 cents on the dollar in Q3. By Q4, it was a big fat ZERO. Not 80. Not 50. ZERO. In 3 months. This is the second time $TCPC has done this recently....
UBS Predicts Private Credit Defaults Surpass 2008 Crisis Level
UBS's worst-case default rate for private credit is 15%. Up from 13% a month ago. For context, the 2008 leveraged loan default rate peaked at 10.8%. UBS is now modeling a scenario worse than the financial crisis for private credit. And they...
Most Weekly BDC Discounts Are Mispriced—Learn Why
Everyone has a BDC take this week. Most of them are wrong. If you don't understand how they trade, what drives the discount, or why NAV isn't what you think it is, start here. https://www.junkbondinvestor.com/p/the-bdc-primer-part-1
Demand Surge Compresses Bond Spreads Despite Record Issuance
Record bond issuance. Record trading volumes. Tighter spreads. More supply should widen spreads. Instead buyers are so hungry that more issuance actually improves liquidity and compresses risk premiums. This works until it doesn’t.
CLOs Bet on Yield While AI Threatens Software Holdings
This is the CLO market right now: Sellers: AI will destroy these businesses Buyers: Thanks for the yield Software is the largest sector in CLO portfolios globally. 10-15% concentration. Nearly half mature in the next 3 years. Someone here is wrong.
AMC Refires $2.5B to Trim Maturity Wall
AMC moving to clean up its maturity wall. $2.5B package taking out 2027 notes (12.75%) and 2029 TL If it prices well, decently lower interest burden. $AMC
Private Credit Bets on Software Amid AI Uncertainty
Five private credit firms just provided $1.4B for a software buyout of OneStream valued at $6.4B. Same week everyone’s asking whether AI will make these companies obsolete. The market is telling you software is at risk. The lenders are telling you...
Alphabet and Meta CDS Explode From Zero to Top Traders
A year ago, CDS on Alphabet and Meta didn't exist. Now they're among the most actively traded single-name contracts in the US market Nobody creates a default insurance market for fun... $GOOG $META
AI Disruption Drives Widening Credit Spreads Ahead of Earnings
AI disruption is hitting IG credit spreads, not just stock prices. Concentrix: BBB-rated, 455,000 call center employees. Paid 130bps concession to refinance. Stock down 24% last week. Spreads doubled in February. Credit markets pricing obsolescence before it shows up in earnings.
BDC Quarterly Letters: Refusing Write‑Downs, Defying Pressure
Every BDC quarterly letter should just say “we are choosing not to mark this down and you can’t make us.”
Most Private Credit PIK Is Bad Yet Labeled Performing
58% of PIK in private credit is "bad PIK" per Lincoln. Borrower stops paying cash. Lender accepts more debt instead. Everyone marks it at par. This is called "performing."
Google’s 100‑Year AI Bond: Ambitious or Foolhardy?
Google issuing a 100-year bond to fund AI capex. Remember JC Penney’s 100-year bond? Issued in 1997. Bankrupt in 2020. At least they got their basis back in coupons.
