π PIMCO: A Growing Divide in Leveraged Finance
PIMCO's latest Credit Market Lens finds high yield bonds better positioned than direct lending and leveraged loans, citing uneven pass-through of higher rates to floating-rate borrowers, weaker post-COVID underwriting discipline, and heavy sponsor concentration in software.
Why it matters: Rising CCC-rated loan shares in CLOs nearing the end of their reinvestment periods suggest credit stress may surface first through valuation marks rather than defaults, sharpening the case for manager selection in private credit allocations.
π Read more