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Archives| PDF| Research |Week of June 7, 2021
“Central banks seem to have dropped their preemptive approach for dealing with inflation.” - Mark Dowding, chief investment officer, BlueBay Asset Management.
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Inflation Nation (Last of a Series)
“We are in a new era with the Fed. They have a new reaction function…[and] this is their first trip around the track with it.” – Anne Mathias, senior strategist, Vanguard.

Inflation, or the threat of it, presents challenges for both regulators and investors.

Higher inflation generally impacts fixed income assets negatively as increased rates erode bond values. Public equities, on the other hand, respond to the growth aspects of inflation positively. Last week’s commentary from Natixis’ chief US economist identified how well some commodities have fared in this environment.

Brian Nick, Nuveen’s chief investment strategist, spoke recently to us on the investment implications of higher-than-expected inflation. “TIPS breakevens are pricing in higher inflation expectations in the short-term, with the breakeven curve still inverted...
Readers' Say
This Week’s Question
This summer I will be spending more money on….
(*All responses are confidential.)
Travel
Fitness & wellness
Personal care products
Apparel
Restaurants
Last Week's Results
How comfortable are you returning to the office this summer?
Chart of the Week
What Inflation?
Despite the threat of higher prices, long-term interest rates have eased, supporting bonds of all stripes.
Source: Nuveen, Bloomberg
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Stat of the Week
 Loan Stats at a Glance 
PDI Picks
The distressed opportunity mounts up
Leveraged loan defaults have been accelerating, with companies having come under strain during the pandemic...
Leveraged Loan Insight & Analysis
A handful of larger BDCs
failed to cover dividend in 1Q21
Larger BDCs, including Owl Rock and Ares Capital Corp, saw lower net investment income levels for 1Q21, raising concerns over dividend coverage...
The Pulse of Private Equity
Long-dated fund market is growing
Long-dated funds are growing in popularity. A new analyst note from PitchBook takes a closer look at the growing market, generally defined as funds built to last for 15 years or more...
Contact: Alex Lykken / PitchBook
High-Yield Bond Statistics
Weekly fund flows source: Lipper
Covenant Trends 
Average New-Issue Clearing Spreads (Single B) 
and Covenant Terms for PE-Backed First-Lien Institutional Loans
Private Debt Intelligence
Average fund size in private debt
increasing in 2021
The average fund size in private debt has increased by almost $200m between 2020 and 2021 so far...
Debtwire Middle-Market
Contact: Hema Oza/Debtwire 
Reorg Credit Intelligence
Solutions 30 Seeks New Investor; Stocks Plunge as EY Refuses to Sign Off 2020 Accounts
French-listed outsourcing company Solutions 30 is in talks with investment banks as it seeks a new investor. The company said it could be taken private following its recent accounting issue with its auditor EY. The company published its unaudited 2020 annual report on May 24 after EY refused to certify the accounts because it hadn’t been given the information necessary to perform the audit, EY said. After the report was released, much of the company’s €1.1 billion market value was wiped out as the shares began trading again following a two-week halt.
(To read our full analysis of the Solutions 30 situation discussing their stock plunge as EY refuses to sign off 2020 accounts click here)
Contact: Matt Danese/Reorg 
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