Share this report:
Global credit funds & CLO's
July 2023 | Issue 256
Published in London & New York.
Copyright Creditflux. All rights reserved. Check our Privacy Policy and our Terms of Use.
July 2023 | Issue 256
Event Private credit
Making chances
From co-investments to stakes in junior capital and distressed credit, delegates at the Debtwire Private Credit Forum heard the sector offers a range of opportunities, even with deal-flow down
“70% [of sponsors] suggest that, if they need financing, they’ll use the private markets”
Brad Marshall
Global head of private credit strategies, Blackstone Credit
Although Blackstone cheers for its public and private credit businesses, the dynamic in the next 12 months is all about private credit.
“I’d say 20% of our portfolio has gone through some form of repricing”
Spyro Alexopoulous
Senior managing director and head of originations, Golub Capital
If a sponsor makes an add-on acquisition, they can reprice their existing debt to take advantage of higher market pricing.
“Activity has picked up”
Charlotte Muellers
Co-head of North America, credit investments, PSP Investments
Deal activity was slow in the first half of the year, but speakers were optimistic this will change.
“Being opportunistic and wrong is too high a risk”
Bill Sacher
Partner & head of private credit, New York, Adams Street Partners
It’s important to prepare for a recession, even if you don’t think one is coming.
“What’s interesting is the prominence of insurance money”
John Timperio
Partner, Dechert
Dechert are working on 20 rated feeder funds structured to allow insurance companies to access private credit.
“Fallen angels from CLOs offer significant opportunities”
Ben Radinsky
Principal, HighVista Strategies
Managers should look closely when major players are forced out of a market for technical reasons.
“Activity in our junior capital business is at record levels”
Randy Schwimmer
Co-head of senior lending, Churchill Asset Management
Loan-to-value sponsors are looking for flexible capital to go in between senior debt and their own money.
“Private equity firms are putting on more conservative capital structures”
Wynne Comer
Chief operating oicer, AGL Credit Management
The average leverage of borrowers in Comer’s portfolio has decreased for three consecutive quarters.
“When a fund is coming up to exit its reinvestment period, we look at the CLO indenture”
Ian Gilbertson
CLO portfolio manager, Invesco
Every CLO indenture is unique, and some constraints on trading and reinvesting can create opportunities.
“Issuers are putting superpriority loans on top of first lien loans”
Eric Glyck
Head of CLO structuring, Octagon Credit Investors
Some loans are seeing recoveries between 80% and 100%, while others are getting 5% to 15%. The lower rate was anticipated, due to the lack of covenants and looser loan documentation.
“CLO vehicles have evolved”
Justin Pauley
Head of CLO capital markets, Brigade Capital
Managers have taken steps to address documentation issues that disadvantaged CLOs when defaults spiked in 2020 following the onset of the covid downturn. Brigade has amended all its old deals.
“Discounts can be anywhere from 50 cents on the dollar”
Luca Salvato
Partner, Ares
Private credit secondaries can offer discounts, but pricing varies wildly based on the nature of the assets on offer and between LP-led deals and GP-led deals.
“You need near 20% returns — you’re basically rescue financing”
David Colla
Head of capital solutions, CPP Investments
Where rates are now, companies will have liquidity and leverage issues, and they’re going to need solutions that come with real equity upside.
“There’s a reason we call our asset class alternative credit, not private credit”
Tina Suo
Head of alternative credit, Office of the New York City Comptroller
Alternative credit covers everything outside public credit, and it shouldn’t confine you to traditional, directly originated loans.
“The quality is okay, but the pricing is a bit of a Hail Mary to get stuff off the books”
Christopher Witkowski
MD, private credit, Ontario Teachers’ Pension Plan
There’s been a lot of talk about private credit secondaries, including several banks looking to set up desks, but not many concrete opportunities.
“Deals get taken away, a couple of hundred basis points inside what we envisioned”
Jennifer Hartviksen
MD, Investment Management Corporation of Ontario
This is a great time to be looking at co-investments, but there’s increased competition among private investors as well as from the public markets.
Share this article:
