The Credit Edge by Bloomberg Intelligence
Junk Defaults May Rise on Small Cap Pain, Says Regions
Jul 25, 2024
Alan McKnight, CIO at Regions Bank, discusses rising default risks for small-cap US companies, especially non-earners, facing debt refinancing challenges. Stress on low-income consumer companies is noted. Opportunities in industrial and defense sectors are explored, with a focus on major borrowers like Honeywell and Lockheed Martin.
37:06
Episode guests
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- Small-cap US companies face default risks due to upcoming debt payments and economic slowdown.
- Credit markets show tight spreads with minimal difference between investment grade and junk bonds, influencing returns.
Deep dives
Credit Market Overview
Credit markets are showing tight spreads with minimal difference between investment grade and junk bonds. The gap between double B and triple B rated bonds is narrow, with returns being influenced by elevated rates. High yield and floating rate loans are performing relatively well, backed by strong issuance for refinancing. Portfolio managers have ample cash for reinvestment.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
