Weekly News – March 25

The BIG trend this week impacting credit markets…

Inflation ramping…

Causing rates to spike…

And bond markets to tumble…

as shown here, against continued strength in equity markets.

What’s the smart money think about bond markets and inflation?

Mohammad El-Erian, here, on why the Fed has lost credibility
amie Dimon, here, predicting 12-15 rate hikes
Ray Dalio, here, on why bonds are in a bubble

Meanwhile, covenants and maturities no longer matter…

Maturities Do Not Trigger Most Bankruptcies, Liquidity Shortages Do According to Fitch 

But high yield leverage and coverage look healthy

Coverage metrics at an all-time high

while high yield leverage continues to improve

Sources: JPMorgan; Capital IQ

Puerto Rico is back in the news…

Puerto Rico exits bankruptcy, here, but PREPA restructuring is in the cross-hairs: The Center for a New Economy proposes a steep haircut of 44% on PREPA debts after a third failed attempt at a consensual plan. Full proposal here, summary here.

Is J&J teaching 3M the Texas Two-Step?

Insurers (and bankruptcy professionals) sure hope so! 

What Justice Breyer’s retirement means for bankruptcy safe harbors

Justice Breyer retires, here (aka, Merit Management’s Footnote 2)

Our decision of the week…

Fifth Circuit Declares Bankruptcy Court Victorious Over FERC in In re Ultra Petroleum Corporation

Upcoming Events

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March 30: Saul Ewing: Bankruptcy Roundtable Discussion

April 13: Faegre Drinker: Securities Law and the Distressed Bond Trading Market

April 26: TMA: NYC Judges Luncheon featuring Judges Drain, Jones & Lopez

April 28: American Bankruptcy Institute Annual Spring Meeting

May 11: VALCON 2022

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