Dillow Says Lack of Liquidity Creates Investment Opportunities

The transcript discusses the current state of the credit market, highlighting issues with high yield issuance and dealer inventory. It explores the impact of liquidity changes on corporate credit and the opportunities arising from complex capital structures. The conversation also compares the performance of floating rate credit to fixed rate credit, noting the outperformance of the former as the Fed normalizes rates. The discussion emphasizes the importance of understanding these dynamics in the context of market changes since the financial crisis.

What has been the impact of reduced dealer inventory on high yield issuance?

• Increased issuance and tighter spreads

• Decreased issuance and wider spreads

• Increased issuance and wider spreads

• No change in issuance or spreads

How has the bond market changed since the financial crisis in terms of liquidity?

• Liquidity has increased significantly

• Liquidity has decreased, reducing opportunities

• Liquidity has remained the same

• Liquidity has decreased, creating opportunities in stressed situations

What creates opportunities for investors in complex capital structures?

• High dealer inventory

• Stable market conditions

• Complicated financial packages with multiple holding companies

• Simple financial packages

Which type of credit has outperformed in the current year?

• Investment grade bonds

• Fixed rate credit

• Floating rate credit

• High yield bonds

What is the yield on European investment grade credit after spread widening?

• 3.0%

• 0.5%

• 1.3%

• 2.5%