Big hedge funds shop for bargains in corporate debt markets
Big-name hedge funds are snapping up bargains in junk bonds and other corners of the corporate debt market, as they bet a sell-off sparked by the darkening global economic outlook has gone too far.
Corporate debt has been hard hit this year by fears that steep increases in borrowing costs will lead to a wave of defaults at groups that have grown accustomed to years of easy money. Interest rates for risky borrowers have soared.
But several managers, including Third Point’s Daniel Loeb, Elliott Management’s Paul Singer and CQS’s Sir Michael Hintze, say parts of the credit market have fallen too far relative to the risks of default, and some are starting to build up their holdings.
This story originally appeared on: Financial Times - Author:Laurence Fletcher
