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Feb 16
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WATCH
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Laura Noonan
Global Finance Reporter, Bloomberg
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Regulators are concerned about "unseen ties between private credit and banks" ($2.2 Trillion in lending commitments). However, there is a "move towards deregulation." The sector is growing rapidly and deregulation fuels it further, but the opacity creates "tail risk." If regulators cannot see the leverage, a shock could be systemic. WATCH. The deregulation trend is bullish for profitability in the short term, but the systemic risk is rising. A credit event revealing hidden leverage that triggers a regulatory overreaction. |
Bloomberg Markets
Memory Chip Shortage is Global Crisis in the ...
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Feb 13
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AVOID
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Olivia Fishlow
Reporter, Bloomberg News
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Bloomberg investigation found BDCs have mislabeled ~$9 billion in loans; "Software" exposure is often hidden under "Business Services" or "Retail" labels to avoid investor scrutiny. Private Credit has been sold as a safe yield haven. If the underlying collateral is actually B2B software (the sector most at risk from AI disruption), the book value of these loans may be overstated. Redemptions are already ticking up. AVOID. Transparency risk + Sector headwinds = "Cockroach theory" (where there is one mislabeled loan, there are likely more). Software companies prove resilient; BDCs maintain strong repayment rates. |
Bloomberg Markets
Inflation Data Calms Markets | Bloomberg Open...
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