The LFI Levered Lines Podcast The LME Era: Scale, Co-ops & Lender-On-Lender Risk with Aegon Asset Management
Sep 23, 2025
Jim Schaeffer, Global Head of Leveraged Finance at Aegon Asset Management, dives into the complexities of today's credit markets. He discusses the surprising tight loan spreads amid rising inflation and borrower pressures. Jim explains the nuances of liability management exercises, contrasting cooperative strategies with coercive structures in lending. He emphasizes the importance of early decisions and scale in influencing outcomes while offering insights into the evolving landscape that creates opportunities for distressed investors.
AI Snips
Chapters
Transcript
Episode notes
Bifurcated Loan Market
- The leveraged loan market is bifurcated: strong technical demand and tight spreads mask stressed pockets.
- About 6–10% of credits face real pressure from higher rates, maturities, and input-cost stress.
Commit Only With Influence
- Go all-in only when you like the business and can influence the outcome from your position in the capital structure.
- Prioritize influence, control, and a clear path to recovery before committing significant capital.
Decide Early And Assess Scale
- Decide early in LME situations and assess whether you have the scale to participate meaningfully.
- If you lack scale to influence the process, exit before getting disenfranchised.