00:00What risk rewards do you see in leveraged loans right now, Sinjin? Well, that chart really illustrates it very well.
00:06Just the dispersion is at near an all-time high in the loan market. If we do get more rate
00:13hikes from this point forward, it only exacerbate that dispersion. And the borrowers who are lower rated, who are lower
00:19quality, basically because they carry higher financial leverage on their balance sheet, will have that much more trouble extending their
00:25maturities. They'll have to pay that much more to extend them even one, two or three years to
00:29to stave off a default. What do we know about the refinancing talks that are probably happening right now, especially
00:36for the LBOs that were done when rates were very low, Sinjin? Well, those were capitalized, as you said, with
00:42much lower borrowing costs. And so those companies are now running their own scenario analyses for what it looks like
00:47to carry higher borrowing costs. And to extend those loans, they will have to pay up to do so in
00:54order to get a market clearing price or find capital from some other asset class if possible.
00:59Like private credit, for instance? Private credit has been a bit of a pressure release valve for the institutional loan
01:06market in recent years. That has dissipated somewhat. High yield is also a component. Some loan issuers are starting to
01:14issue into high yield. We do have a few data points of loan issuers being able to extend their maturities
01:19in conjunction with lowering their overall exposure within the loan market.
01:23And the main buyer base of institutional loans in the form of CLOs, they like that. It lowers the overall
01:29exposure given how high it is, especially in software.
01:31Thank you very much, everyone.
01:32and even having trouble and such a clean good, that I can tell people who have taken the number of
01:32these valuable arguments over the world and what have the hed порядка of them was making....
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