Credit Markets Getting a 'Little Weary,' Z Capital CEO Says

The video discusses the current state of the silo market, highlighting its size and volatility. It addresses liquidity concerns, particularly in leveraged loans and high yield markets, and the challenges in market making due to reduced dealer participation. The need for transparency in trading is emphasized, with a focus on the impact of program trading and ETFs. Investment opportunities in lower-rated debt instruments are explored, along with a shift in the credit hierarchy towards leveraged loans. The video concludes with a discussion on the implications of these trends for market participants.

What is the significance of the inversion of yields between high yield and leveraged loans?

What are the potential opportunities in lower-rated debt instruments according to the discussion?

How has the composition of balance sheets changed over the last 20 years regarding leveraged loans and high yield?