Grant’s Current Yield Podcast A PROMISE TO PAY
Jun 26, 2025
Michael Haynes, Partner and Head of Private Credit at Beach Point Capital Management, shares his expertise on sub-investment grade credit and distressed debt. He discusses the evolving landscape of private credit and highlights the significant challenges posed by rising interest rates and unsustainable debt levels. With anecdotes from his early career and athletic past, he emphasizes the need for regulatory oversight and investor education in this complex market. The conversation also teases an upcoming finance conference, spotlighting future industry leaders.
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Sartorial Lesson at Goldman Sachs
- John Whitehead's first day at Goldman Sachs involved a sartorial lesson about professionalism.
- He was told to change his seersucker suit, as it was deemed too casual for the firm.
Hidden Stress in Private Credit
- Despite tight spreads signaling market health, 20-30% of private credit borrowers are not covering debt service.
- This high non-coverage indicates underlying credit stress not apparent in bond pricing.
Legacy of Low Interest Rates
- Private equity firms paid ambitious multiples based on near-zero interest rates.
- Higher current rates make those debt levels and costs unsustainable today.