KKR Loads Up on Risky CCC Loans as Other Fund Managers Dump the Debt

 

• Firm is scooping up CCC rated loans amid a ‘purge’ from CLOs
• They still see opportunities despite compressed risk premiums

Credit investors are “focusing too much on spreads” and are missing out on bargains further down the credit rating spectrum where they can find better relative value, according to KKR & Co.

“There has been so much focus on how much tighter spreads can go in credit,” the firm’s Chris Sheldon, co-head of credit and markets, and Tal Reback, director, said in a phone interview. “Compelling relative value has become less apparent in this market, and many believe there are limited pockets of opportunity.” But the reality, they said, is that there is still a lot of opportunity, it just isn’t obvious.

https://www.bloomberg.com/news/articles/2024-06-17/kkr-buys-ccc-loans-as-investors-focus-too-much-on-debt-spreads