The Credit Edge by Bloomberg Intelligence Monarch Sees Bigger Hazard Than Fraud
Oct 23, 2025
Adam Sklar, Co-Chief Investment Officer at Monarch Alternative Capital, discusses critical trends affecting corporate credit and investment strategies. He emphasizes that a declining US economy poses a bigger threat than fraud, highlighting widespread economic pain. Sklar points to sectors like autos and chemicals as potential opportunities while warning of risks in software companies. He also examines how tariffs impact consumer prices and explores the role of loan modifications in restructuring, revealing that careful monitoring is essential in a volatile landscape.
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Macro Troubles Trump Fraud Risk
- A weakening US economy is a bigger hazard to corporate credit than isolated frauds.
- Adam Sklar says broad consumer pressure and higher rates expose levered capital structures to real stress.
Uneven Macro Is The Core Credit Issue
- Underwriting errors may exist but uneven macro conditions are the central credit problem today.
- Sectors tied to the U.S. consumer show revenue softness that strains debt service metrics.
Software Concentration Creates Systemic Risk
- Legacy SaaS concentration in private credit could be a systemic vulnerability if AI disintermediates cash flows.
- Software lending may be 30–40% of private credit, making disruption risk notable.