Author Topic: "What The Bubble..." Chart Of The Day: Half Of Loans Issued In 2013 Were "Covenant Lite"  (Read 277 times)

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Offline flowers

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If you ask anyone at The Fed (apart from Jeremy Stein) if there is a bubble in the credit markets, the answer is definitive "no" since bubbles are always obvious. Well, hopefully, the following chart will make it "obvious" that the Fed's policy has driven a 'reach for yield' so excessive as to explode the growth of so-called cov-lite loans. This 'riskiest of risky' loan issuance, while already at record high levels, has now massively exceeded the previous bubble in terms of percent issued as the demand for anything with yield 'enables' the worst of the worst companies to refinance their zombie-like existence.

Of the $644.4 billion loans issued, $293.35 billion was Covenant-lite...

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