-- Bond fund managers have so much cash they’re turning to the derivatives market to put it to work, pushing down the cost of protection against defaults close to levels that prevailed when central banks were just starting to raise interest rates.A $2 Billion Airport Will Test Modi’s Mission, Adani’s AmbitionsWant to Be ‘Certified Crypto Expert?’ You Need 11 Hours and $229
“We like them because of their liquidity but also from a valuation perspective. You’re currently paid to be in CDS versus cash,” he said in an interview, referring to the relatively wide level of the derivatives’ spreads compared with that of an equivalent cash bond. To be sure, the broader tightening masks some fragmentation in parts of the market. Euro-denominated bonds issued from firms rated CCC and below, which are at high risk of going bust, have missed out on the general rally. In addition, an S&P Global Ratings worldwide tracker of corporate failures in 2024 reached the highest year-to-date level since 2009, the ratings company said in a recent release.
Low prices. Risky underwriting. Traditional lenders are trying everything to win M&A funding deals. And now they’re being asked to provide delayed draw term loans — previously a hallmark of private credit deals. Cash-strapped developer China Vanke Co. has been fighting to avoid its first-ever default, and while investors’ fears of an imminent meltdown appear to be easing, its long-term prospects are less clear.
Potential bidders for Sanofi’s consumer health division are mulling debt packages of about €7.5 billion , which would make it one of the biggest leveraged buyout financings in recent years.