Moynihan: Market Bringing Back Discipline to Leverage

The video discusses corporate credit, highlighting how banks are becoming permissive with loan terms. It covers leverage finance, market discipline, and the competitive environment in the credit cycle. The speaker emphasizes that while credit risk is low, it will rise, reflecting economic conditions.

What is a key concern mentioned about banks in the context of private equity?

• Banks are too restrictive with loan terms.

• Banks are not following any guidance.

• Banks are not competitive enough.

• Banks are becoming very permissive with loan terms.

What is a significant issue discussed in relation to leverage finance?

• Lack of market discipline.

• High leverage in selective deals.

• Excessive regulation.

• Low competition in the market.

How are the yields and spreads described in the middle market?

• Competitive and tight.

• Very high and wide.

• Moderate and stable.

• Low and declining.

How does the current state of corporate credit compare to the early 1990s?

• Credit risk is higher now.

• Credit risk is lower now.

• Credit risk is the same.

• Credit risk is unpredictable.

What is expected to happen to credit costs in the industry?

• They will remain the same.

• They will decrease significantly.

• They will fluctuate unpredictably.

• They will increase from current lows.