Episode Details
| Title | Why Credit Conditions Have Actually Eased Over Past Year | Oaktree’s Wayne Dahl on High-Yield Bonds, Leveraged Loans, Private Credit, and the Recession Yet To Arrive |
|---|---|
| Date | 7/29/2024 |
| Podcast | Forward Guidance ↗ |
Key Insights
Bullish:
- 🟢 $High Yield Bonds - High yield bonds are seen as attractive due to favorable yields, low defaults, and increased quality at the higher end of the market.
- “The yield on high yield is between 7 a half and 8 percent, today and over over the last few months, which if you did that same analysis, you would find that that would actually appear quite favorable over that same time period...” - Wayne (0:00)
- “Defaults have actually remained quite low over the last couple of years.” - Wayne (0:00)
- “Defaults remain low, and I think one of the big reasons for that is that we did have a number of defaults during COVID.” - Wayne (0:00)
- “The increase in quality at the higher end of the market, the double b part of the market, and that kind of, in general, higher quality market has, you know, kept defaults relatively low.” - Wayne (0:00)
- “I think the yield alone is is a big factor, and I do think that's something that has driven investors to continue to invest in high yield and quite frankly find high yield attractive.” - Wayne (0:00)
- 🟢 $Structured Credit - 🔒
- 🟢 $Nonagency RMBS - 🔒
- 🟢 $Data Centers - 🔒
- 🟢 $Asset Backed Securities - 🔒
- 🟢 $Power Generation Companies - 🔒
- 🟢 $Private Credit - 🔒
Bearish:
- 🔻 $Specialty Retail - 🔒
- 🔻 $Office Space in Commercial Real Estate - 🔒