Blackstone: Opportunities in High Yield Private Debt
01 mins 27 secs
Blackstone's global head of credit Dwight Scott says that while others are worried that the higher for longer interest rate environment could put significant strain on credit. He sees a healthy credit market an opportunity in high yield private debt which is currently registering below historical average default rates.
I don't think they're being masked. So we're coming off of in a high yield and loan market, it's about a 2% default rate over the last 12 months. That remains below the historical average default rate of around 3%. And to give you some context, the default rates spiked up to like 12 14% and the great financial crisis. So put, put all those things in context right now, if you look at loans and high yield, about 9% of those markets trade at default levels, historically, that would result in about a 3% default rate over the next 12 months. So we we actually feel like the market's pretty stable um loan debt to in the fourth quarter was down to below 4%. Coverage, coverage of interest coverage was up above approaching 5%. So the market is healthy and by the way, that debt to dollar level is the lowest it's been since 2018. So the market is strong and therefore, I don't think we're going to see as much disruption as many people are worried about in the market.Transcript
Blackstone’s Global Head of Credit, Dwight Scott, says that while others are worried that the higher for longer interest rate environment could put significant strain on credit markets, he sees a healthy credit market and opportunity in the high yield private debt, which is currently below the historical average default rate.