Creditor Corner |
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Your weekly curated content from the Creditor Rights Coalition |
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In This Week’s Creditor Corner Examiner appointed in Hughes, First Brands converts to Chapter 7, what’s next for Thames Water, corporate and government yields head higher, insurers cozy up to private credit, Stark and Burian talk credit—and much, much more…
Featured Content Bruce Richards on the Markets Strong Economy, Record Earnings, Yet Credit Stress is Growing at Leading BDCs as Non-Accruals Surge |
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Tweet of the Week |
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Exclusive Content |
Examiner in Hughes |
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Exclusive Content |
Who Could Have Seen This Coming? |
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What’s next for Thames Water? |
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Data Download |
Yield on CCC Bonds at Highest Level Since YE2023(%) |
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Our take: It is like what Druckenmiller said: the long-term yield is the last remaining fiscal disciplinarian. We are clearly seeing the effects, as recent Treasury yield spikes put pressure on CCC bonds. This is in addition to the pressure already felt across leveraged markets because of increasingly quality-conscious credit investors. |
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Exclusive Content |
Don’t Worry, It’s Fine |
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Our take: Over $40 billion in insurance investments are rated by Egan-Jones alone – a firm accused of inflating its ratings on credits that often get just one rating instead of the multi-firm standard public markets require.
It’s clear why people are starting to talk with fear about the growing incestuous relationship between insurance and private credit. With insurance regulators now sounding the alarm, is it too little, too late, or much ado about nothing. |
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What We’re Listening To |
State of Distressed: Burian & Stark on the Preordained Bankruptcy
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Shoppin’ |
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Featured Content |
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Strong Economy, Record Earnings, Yet Credit Stress is Growing at Leading BDCs as Non-Accruals Surge
The economy remains strong, with continued tailwinds: corporate earnings are on their strongest growth trajectory in years, equity markets are at all-time highs, and the Fed is holding rates steady.
That is an attractive backdrop for credit. As companies grow earnings relative to their outstanding debt, credit fundamentals can improve meaningfully.
Yet stress is building as the Top-10 BDCs have seen non-accrual debt climb to an alarming 5.95%, according to PitchBook and LCD data.
The rise in PIK and non-accruals does not yet fully capture the problem brewing in software as BDCs have high exposure to this sector. The bigger issue for software is valuation: leverage levels are increasingly out of proportion to current enterprise values. That disconnect will ultimately need to be resolved, particularly as the maturity wall comes into focus over the next three years.
For capital allocators, now is the time to ask the hard questions to understand how clean the portfolio is.
Questions to ask:
How many companies have no covenants?
What percentage and which specific issuers have/will require extensions or amendments to avoid default?
What percentage are now PIK? What percentage are non-accruals?
The current vintage should generate strong returns, in my view. However, legacy issues from the prior vintage will take time to work through. Buying into a fully seasoned portfolio can often be an attractive way to invest, but my strong preference is for a pristine portfolio – one where all loans are performing on plan or ahead of plan, with no underlying issues that need to be worked out.
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To follow Bruce’s thoughts on the markets, investing and more, follow @bruce_markets |
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From Research to Results: The Connected Portfolio Management Experience
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September 9, 2026 |
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Emerging Markets Forum: Distressed Opportunities with Octus & Cleary Gottlieb |
September 14, 2026 |
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The Road Not Filed: Options Outside Chapter 11 |
September 15, 2026 |
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2026 Moody’s Ratings US CLO & LL Conference |
September 17, 2026 |
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Views from The Bench |
September 25, 2026 |
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Restructuring in the Americas |
October 15, 2026 |
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The Data Download |
Bringing Transparency to the Bankruptcy Process |
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Our Take: The Daily Cost of BK Legal fees Are Increasing. Are we shocked? No. We took a deep dive to see what is driving up the daily cost of restructurings and the culprit: Increasing Legal Hourly Rates. We analyzed final fee apps for top debtor law firms from 2018 to 2024 and found average hourly legal fees have increased by over 65% since 2018. Maybe a little bit of sunlight is the right disinfectant to help remedy the problem… |
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