Credit Spreads to Do 'Reasonably Well': Academy's Tchir

The video discusses the current state of the credit market, noting that credit spreads are relatively cheap compared to past years, with potential for further tightening. The high yield market has improved in quality, making it safer for investment. However, caution is advised with leveraged loans due to their association with smaller deals and CLOs. CLOs are expected to manage defaults by negotiating terms, delaying potential default cycles.

What is the significance of credit spreads in the current market context?

In what ways might CLOs influence the default cycle of leveraged loans?