FICC Focus State of Distressed Debt: 2026 Outlook, STG, First Brands, Hertz
Jan 20, 2026
Phil Brendel, a Senior Distressed Analyst at Bloomberg Intelligence, shares insights on distressed debt dynamics, highlighting the low levels of distressed opportunities amid tight high-yield spreads. Nagisa Balluku, a Senior Litigation Analyst, dives into recent bankruptcies, including STG Logistics and First Brands, discussing legal intricacies and disputes. They also tackle the implications of Hertz's Supreme Court petition denial and examine Saks Global's Chapter 11 challenges, all while considering what might disrupt the current credit rally.
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Complacency In Tight Credit Markets
- High-yield distress is unusually low despite multiple potential economic flags across sectors.
- Phil Brendel sees tight markets as increasing downside risk if a correction arrives.
Tighter Markets Make The Fall Harder
- Phil Brendel remains bearish despite record-tight spreads and persistent demand.
- He warns that tighter markets amplify the severity of any eventual downturn.
Watch Seasonal Shifts Around March
- Expect continued market strength through January and into February before possible weakness.
- Monitor seasonal patterns, as March often marks a short-lived shift in distressed performance.