Sorry, Busy Rating Private Credit Deals
Sorry I was busy rating private credit deals and didn’t see what happened in markets yesterday. Have you seen these headlines, rating agency Egan-Jones has rated some 3,000 private credit deals with a team of just 20 analysts. I figure I can get to work and rate a solid 150 deals in the next couple of months if I stop writing this blog. Why do private credit ratings matter and why is this even a story? Well it matters for institutional allocators who want to invest their insurance or pension capital in private credit funds. It’s unknown to me whether banks look at any of these ratings, but the story of banks effectively “re-tranching” themselves by lending to private credit funds rather than making the loans that private credit makes to mid-market businesses. Nonetheless it’s not lost on everyone that a loan carrying a double-digit interest rate is probably pretty risky, but investment grade? Nevermind I’ll just get back to the stack of 150 deals I’ve been assigned and rate them as high as I can.
Rating private credit deals is probably more interesting than hearing about tariffs.
Will Trump and Xi meet this week?
Despite signs that things are moving the wrong direction between the U.S. and China’s trade dispute, there was some optimism that Trump and Xi might speak as soon as this week. And some optimism is all you need to send stocks higher. The S&P edged up to 5,936.
Bonds didn’t fare as well, with the yield curve steepening some despite weaker than expected manufacturing data. As of the time of this writing, the 2Y yield was 3.95% and the 10Y 4.45%. The narrative surrounding yields continues to focus both on the short-term inflationary impact of tariffs and the longer-term deficit concerns.
Or maybe yields and stocks are all just a growth story, after all the Atlanta Fed GDP Now is estimating 4.6% GDP for 2Q.
Double My Steel Please
On the day we’ll get some labor market signals from the JOLTS report and await whether tariffs on steel and aluminum go up to 50%.
Back to rating—only 149 deals to go,” or “If you need me, I’ll be printing triple-Bs.”
XTODs
XTOD: It’ll soon be 2 years that Real US 10s rates have been at or around 2%. The only other recent period when a sustained level close to or above 2% was observed started in late 2005 and ended with GFC. 2% real is very taxing.
XTOD: In the US housing market, there are currently 34% more sellers than buyers. Sellers haven't outnumbered buyers by this much ever in data going back to 2013: Redfin. Redfin expects home prices to drop 1% by the end of the year as a result. h/t
@RenMacLLC https://redfin.com/news/sellers-vs-buyers-price-impact/
XTOD: On June 2, the #GDPNow model nowcast of real GDP growth in Q2 2025 is 4.6%: https://bit.ly/32EYojR. #ATLFedResearch Download our EconomyNow app or go to our website for the latest GDPNow nowcast: https://bit.ly/2TPeYLT.
XTOD: this is gold https://pbs.twimg.com/media/GsF5LXQaUAQYKYA?format=jpg&name=900x900
XTOD: 60% of young adults say their lives lack purpose. Here are 7 questions that can help you find direction: 🧵….4. What’s your sentence? One sentence. That’s it.
“He helped people find their voice.” “She made science accessible.” “They made work better for everyone.” Distill your life into a sentence—and aim toward it.
https://x.com/INArteCarloDoss/status/1929652381253300673
https://x.com/lisaabramowicz1/status/1929683538301145313
https://x.com/AtlantaFed/status/1929563954889543786
https://x.com/Jayyanginspires/status/1927955356300259676
https://x.com/DanielPink/status/1928184642697580687
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