Cloud 9fin

Mike Harmon, a Stanford lecturer and managing partner at Gaviota Advisors, shares insights from his book on fixing broken balance sheets. He likens corporate debt dynamics to treating sick patients, explaining how even giants like Twitter can fall prey to high debt. The conversation explores the impact of meme stocks on vulnerable companies, while also discussing strategies for restructuring that highlight the balance between vision and practical tools. Harmon emphasizes the need for adaptability in today’s financial landscape, filled with challenges and opportunities.

After a great run co-founding and helping to build up the European Leveraged Finance Association, Sabrina Fox is putting ELFA on the shelf to focus on her work at Fox Legal Training and Good Girl to Goddess.In this episode of Cloud 9fin, ESG analyst Jennifer Munnings sits down with Sabrina to explore how ELFA has shaped buyside engagement and elevated standards in credit markets. From the rise of J.Crew blockers and their impact on covenant protections to ELFA’s efforts to foster transparency and innovation in ESG practices, Sabrina offers a front-row perspective on the evolving landscape of leveraged finance. They also discuss the challenges of balancing incumbent flexibility with investor safeguards and what lies ahead for the industry as Sabrina embarks on her next chapter.Have any feedback on this episode? Send us a note at podcast@9fin.com. Thanks for listening.

Michelle Handy, Chief Investment Officer of Direct Lending at First Eagle Alternative Credit, shares her expertise in lower middle market lending. She discusses the challenges of intensifying competition and a complex macroeconomic landscape. Handy highlights asset-based lending as a promising strategy and emphasizes the critical role of strong sponsor relationships during turbulent times. Additionally, she dives into the nuances of covenant negotiations and the impact of retail capital on the lower middle market, shedding light on investment prospects and risks.

Stakeholders face tough choices as Lycra navigates a complex balance sheet while considering a private credit option. The podcast delves into the strategic dynamics of financing in tight markets, where private credit is becoming increasingly appealing. Listeners learn about the intricate negotiations and conflicts among bondholders and financial players involved in restructuring. Additionally, it highlights the risks and challenges of refinancing, showcasing the changing landscape of private credit that adapts to current economic pressures.

Dan Zwirn, Co-founding CEO and CIO of Arena Investors, delves into the complexities of the private credit market. He challenges the notion that we are in a 'golden age,' addressing the oversaturation and risks tied to direct lending. Zwirn discusses how monetary policies may impact investments and the rising bankruptcies in the space. He highlights the challenges faced by both General Partners and Limited Partners, along with strategies to navigate this evolving landscape, emphasizing a cautious yet opportunistic approach.

Private credit in both the US and Europe has faced a great deal of pressure from bank lenders in 2024. But despite a slow start, the asset class is holding its ground on a year-to-date basis.In this week’s episode of Cloud 9fin, private credit editor David Brooke digs into the data with analysts Devin McGinley and Elijah Jackson. They chat through the trends, diving into their respective Q3 2024 private credit reports. You can read both reports here and here.To learn more about 9fin’s private credit reports, send a note to the team at private-credit@9fin.com. For feedback on the podcast, or to learn how to get involved, send a note to podcast@9fin.com.Thanks for listening!

The recent election results are reshaping the financial landscape, influencing equities and bond yields. Tariffs and inflation effects loom large, especially for retailers reliant on imports. Political changes are creating divergent impacts across sectors like metals and renewable energy. ESG perspectives show stark contrasts between the US and Europe. Additionally, the private prison sector is witnessing a revival as the political climate shifts, highlighting the complex ties between business and politics.

Peter Benson, a private credit reporter at 9fin, dives into the intricacies of NAV loan structures during a challenging M&A environment. He discusses the shift toward NAV lending as a flexible liquidity solution amid low deal activity. Expect insights on how NAV loans compare to traditional financing methods and the evolving role of private credit firms in this landscape. Benson also highlights the implications of Federal Reserve policies on future M&A activity and the structural challenges private equity sponsors face in adapting to current financial realities.

Batten down the hatches, because the cost of environmental damage continues to rise.Hurricanes and natural disasters pose a threat to leveraged credits. This year’s Atlantic hurricane season, which runs from June to November, has caused significant physical and financial damage to borrowers and civilians located mainly in the southeastern part of the US. Damages from hurricanes Helene and Milton, specifically, are estimated by published reports to be around $50bn each, ranking them among the costliest disasters in recent history.In this week’s episode of Cloud 9fin hosted by leveraged finance editor David Bell, senior reporter Sasha Padbidri talks to Karen Clark, a Nobel Prize-winning pioneer in the catastrophe modeling space. Clark was also the subject of Michael Lewis’ 2007 article In Nature’s Casino for The New York Times Magazine, which examines the topic of catastrophe modeling in great detail.Together, they discuss how the technology of catastrophe modeling has advanced since the 1980s and why understanding these risks are critical for company executives and insurers as natural disasters continue to reshape the financial landscape.

Bill Ammons, founding partner and portfolio manager at AlbaCore Capital, dives into the evolving landscape of direct lending and leveraged finance. He highlights the importance of flexibility and credit selection in navigating a competitive market. Bill shares insights on strategic partnerships meant to enhance growth and discusses how firms can adapt their credit strategies to better serve investor needs. He also reflects on the resilience of direct lending during economic uncertainties, emphasizing the significance of strong documentation and insightful relationships.