Inside the Blood Sport of Creditor-on-Creditor Violence
Odd Lots
Bloomberg
4.4 • 1.6K Ratings
🗓️ 25 November 2024
⏱️ 47 minutes
🧾️ Download transcript
Summary
In the Zirp era of the mid-2010s, credit markets were booming and investors were clamoring for anything that would produce yield. So they were willing to accept fewer legal protections embedded in bond and loan documentation if it meant they could get a slice of a juicy deal. Today, the proliferation of these so-called "cov-lite" deals has been coming back to haunt the market, with investors now fighting each other over how much they can claw back from struggling companies. Some hedge funds have become incredibly creative when it comes to finding loopholes to exploit in deal docs. So what exactly is "creditor-on-creditor violence" and why has it become such a thing? How much is it adding to big investors' legal bills? And what can be done to reduce all the squabbling? We speak with Sujeet Indap, Wall Street Editor at the Financial Times and author of The Caesars Palace Coup: How a Billionaire Brawl Over the Famous Casino Exposed the Corruption of the Private Equity Industry.
Read More: Hedge Funds Smell Blood as Lenders Turn on Each Other
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Transcript
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| 0:00.0 | Bonds are back. And so is all the credit. P. Jim Fixed Incomes Monthly podcast series. From the latest trends to long-term perspectives, you'll get timely fixed income insights from leading economists, research analysts and investment professionals. Whether you're new to bonds or a seasoned investor, tune in to all the credit wherever you get your podcasts. |
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| 1:25.9 | Hello and welcome to another episode of the Oddlots podcast. I'm Tracy Allaway. |
| 1:27.2 | And I'm Joe Wisenthall. Joe, what do you know about creditor on creditor violence? I don't know anything. |
| 1:31.8 | Other than it's a very punchy term. It's a great. That's literally it. It's come up a few times in, |
| 1:38.0 | all right, it's come up a few times in episodes we've done about credit. And I get the impression |
| 1:43.9 | that, you know, lenders to affirm have |
| 1:46.4 | different status and some are higher up in the rank than others and that they would like to |
| 1:51.8 | probably use the technicalities of the legal code to improve their rank in some sense when |
... |
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