BANKS FLED - BDCs TOOK OVER: Why Private Credit Exploded to $534B

Josef Pschorn interviews John Giordano (Seaport Global Co-Head Credit Research) on BDCs' 15-year explosion from $0 → $534B - and whether BlackRock TCP markdowns + Blue Owl 18% redemptions represent systemic risk.

Born from the Small Business Act, these tax pass-throughs exploded from $0 to $534B in 15 years as banks retreated.

The mechanics:

• 89% first-lien, 5.6x leverage targeting $200M EBITDA companies
• Perpetuals ($277B AUM): Monthly dividends, 5% quarterly gates—half the market
• PIK breakdown: 7.55% public vs 3.93% perpetuals. "Play with PIK... but pay the piper"
• Granularity protects: 50-60 loans = "death by 1K cuts," not blowups

Disclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Host/guest views are their own. Consult professionals before investing.

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Full analysis: ⁠Substack⁠

Recorded: 04.02.2026

#BDCs #PrivateCredit #PIK #BlueOwl #BlackRockBDC #CreditResearch #FixedIncome #SeaportGlobal #FixedFloating

𝗪𝗵𝘆 𝗱𝗼 𝟭𝟯.𝟵% 𝗯𝗼𝗻𝗱𝘀 𝗿𝗲𝘁𝘂𝗿𝗻 𝗟𝗘𝗦𝗦 𝘁𝗵𝗮𝗻 𝟳.𝟵% 𝗯𝗼𝗻𝗱𝘀? 📉 Greg Obenshain (Partner at Verdad Capital) reveals the "Fool’s Yield" trap and why reaching for yield structurally destroys credit portfolios.

In this episode of Fixed + Floating, Josef Pschorn sits down with Greg Obenshain to deconstruct the quantitative reality of the high-yield market. Greg explains his transition from a fundamental PM at Apollo to building a systematic process that proves why credit should be treated as a savings vehicle, not "equities in drag."

They unpack why Total Assets is the #1 predictor of default resilience, the "inversion" of factors needed to solve the Biotech sector, and why Duration is actually a form of known credit leverage.

𝗞𝗲𝘆 𝗯𝗿𝗲𝗮𝗸𝗱𝗼𝘄𝗻𝘀:• 𝗧𝗵𝗲 𝟭𝟯𝟬𝗯𝗽𝘀 𝗔𝗻𝗼𝗺𝗮𝗹𝘆: Why BB bonds (7.9%) beat CCCs (6.8%) since 1988.• 𝗟𝗼𝘀𝘀 𝗬𝗶𝗲𝗹𝗱 𝗗𝘆𝗻𝗮𝗺𝗶𝗰𝘀: How defaults and slippage erode 50%+ of promised coupons.• 𝗙𝗮𝗰𝘁𝗼𝗿 𝗣𝗵𝗶𝗹𝗼𝘀𝗼𝗽𝗵𝘆: Prioritizing "Size" and Asset Scale over earnings narratives.• 𝟮𝟬𝟮𝟲 𝗢𝘂𝘁𝗹𝗼𝗼𝗸: Navigating tight spreads through quality tilts and duration discipline.

𝗗𝗶𝘀𝗰𝗹𝗮𝗶𝗺𝗲𝗿: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Host/guest views are their own. Consult professionals before investing.

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𝗙𝘂𝗹𝗹 𝗮𝗻𝗮𝗹𝘆𝘀𝗶𝘀: Substack

𝗥𝗲𝗰𝗼𝗿𝗱𝗲𝗱: Jan 2026

#QuantCredit #HighYield #FixedIncome #BondMarket #FactorInvesting #FoolsYield #CreditInvesting #VerdadCapital #GregObenshain #CreditPodcast #FixedFloating

In this episode of Fixed + Floating, Josef Pschorn speaks with Tim Riminton, Senior Credit Analyst at Bloomberg Intelligence, about China's chemicals capacity flood, Europe's energy shock, and why INEOS sits at the epicenter of the sector's worst downcycle in years.

Tim and Josef unpack the INEOS divergence: Group Holdings' €700M Project One ethane arbitrage catalyst versus Quattro's 15% yielding bonds and €1bn 2027 refinancing wall. They explore Ratcliffe's cash-leaking conglomerate empire (F1, autos, oil/gas), ring-fenced debt boxes, and what PVC demand signals say about global cyclicals.
From 9x leverage to covenant stress, this reveals the credit playbook for HY/IG PMs tracking chemicals distress and fallen-angel risks.

Key breakdowns:

• 3-year chemical overcapacity crisis + China policy impacts
• INEOS Group vs. Quattro: leverage, assets, risks
• Project One: US ethane (€800/ton) → Europe sales (€1,200/ton)​
• Refinancing walls, 15% yields, covenant stress​

Disclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Consult professionals before investing.

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Full analysis: fixedfloating.substack.com

Recorded: Dec 2025

#ineos #ChemicalsOvercapacity #HighYield #CreditStress #ProjectOne #fixedfloating #creditpodcast

The global chemicals industry is in turmoil - a potential structural reset from China’s capacity build-out, utilization dropping from low-mid 80s to high 70s, and Europe’s energy shock. This has made chemicals one of the weakest European high yield sectors, with spreads blowing out ~600bps over, negative returns, and distress clustering in commodity-heavy, leveraged names.​

Tim Riminton, Senior Credit Analyst at Bloomberg Intelligence (7+ years on basic materials), explains why this isn’t just Europe: overcapacity ripples globally via collapsing EBITDA (one issuer fell 60% Q/Q), plant closures (up to 20% Europe cracking capacity), weaker coverage, covenant stress, and refinancing risks pushing issuers toward private credit.​

We break down oil-to-olefins-to-plastics value chain, US shale ethane cost edge vs Europe/China/Middle East, China’s self-sufficiency shift hurting Korea/Japan exporters, operating leverage mechanics, and demand signals from housing/autos/consumer goods signaling broader credit cycle risks like fallen angels

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Disclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Host/guest views are their own. Consult professionals before investing.#FinancePodcast #CreditPodcast #Chemicals #HighYieldCredit #Plastics #Overcapacity #China #EuropeEnergyCrisis #Petrochemicals #FixedFloating

In this episode of Fixed + Floating, we sit down with Jakub Lichwa, Portfolio Manager on the Multi-Sector Bond team at TwentyFour Asset Management, to explore how insurance companies invest, why private credit has become central to insurer portfolios, and how BDCs, private equity firms, and life insurers are increasingly converging into a single ecosystem of credit creation.

We dive into the mechanics of insurance balance sheets, the growth of private credit as an asset class, and the structural impact of PE-owned insurers on modern credit markets. This episode is a deep look at how long-dated liabilities, ALM constraints, solvency rules, and portfolio-return targets are driving one of the biggest shifts in global fixed income.

Topics we cover:
• What’s actually inside today’s private credit portfolios (direct lending, specialty finance, structured credit)
• How life insurers think about yield, duration, ALM, capital charges, and risk-based capital
• Why US, European, and Japanese insurers allocate to private credit differently
• The rise of private-equity-backed insurers and the new balance-sheet model
• How BDCs, insurers, and private-credit funds form a self-reinforcing funding ecosystem
• The incentives and systemic risks when asset managers control insurance balance sheets
• What could happen if annuity inflows slow or portfolio performance weakens
• Long-term implications for credit markets, liquidity, and financial stability

About the guest:
Jakub Lichwa is a member of the Multi-Sector Bond team at TwentyFour Asset Management. Previously, he was an Executive Director in credit trading at Goldman Sachs and held roles at RBC Capital Markets, Daiwa Capital Markets, and Moody’s. He holds degrees from the University of Bath and the University of Kansas.

Guest newsletter sign-up: https://fixedincome.twentyfouram.com/sign-up-blog-updates-uk

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Full analysis: https://fixedfloating.substack.com/p/private-credits-insurance-flywheel?r=718tew

Disclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Host/guest views are their own. Consult professionals before investing.

In this episode of Fixed + Floating, Professor Edward Altman (NYU Stern) explains the rise of shadow defaults and what credit investors should know about today’s evolving corporate credit landscape. We explore private credit growth, distressed exchanges, and hidden risks in loan and bond markets, and analyze what default patterns may signal for the next 12–24 months.

Edward Altman, creator of the Z-Score and one of the most influential thinkers in corporate credit, shares insights into how leveraged finance has evolved into a $5 trillion market, why private credit is growing, and where silent stress and shadow defaults are appearing across credit markets. His research remains foundational for investors, restructuring professionals, and financial institutions worldwide.

The discussion breaks down how credit cycles lead business cycles, why loan defaults are rising faster than bond defaults, the mechanics of distressed debt exchanges, and the evolution of the modern Z-Score. We also cover PIK toggles, liability management exercises, and hidden risks in private credit, helping professional investors understand the forces shaping credit markets today.

Slidedeck: https://1drv.ms/b/c/3256e611aeacc253/IQBNBxz0rmF8RIZxZBStfVCtAV3t2Twa2015NJrNj1ekQ1s?e=WngDx3

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Disclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Host/guest views are their own. Consult professionals before investing.

In the debut episode of Fixed + Floating, Josef Pschorn sits down with Jared Muroff, Head of Special Situations at Octus, to examine the collapse of First Brands. We explore what went wrong, the market implications, and key lessons for credit investors and professionals navigating stressed corporate credit.

Jared Muroff, CFA, brings over a decade of buy-side and restructuring experience, including senior roles at Balbec Capital and ASM Capital. He shares insights into working capital finance, distressed situations, and Chapter 11 mechanics, providing guidance on how investors can assess and respond to credit risk in today’s markets.

This episode breaks down:

• The root causes of the First Brands collapse

• How working capital financing fueled the crisis

• The mechanics and implications of its Chapter 11 restructuring

• Rising legal fees and hidden bankruptcy costs

• Recovery prospects and actionable trade ideas

• How investors should think about pricing credit risk today

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📩 Email: [email protected]

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Disclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Host/guest views are their own. Consult professionals before investing.

#CreditInvesting #FinancePodcast #MacroMarkets #FixedFloating #FirstBrands #DistressedDebt

Inside First Brands’ Collapse - Snippet

Welcome to Fixed + Floating: The Credit Podcast! 🎙️

Launching this November, Fixed + Floating brings institutional credit investors in-depth conversations with leading voices in credit and macro markets. Our trailer gives you a sneak peek of the insights and strategies we’ll cover in full episodes.

Listen to expert discussions on:

- Credit markets and investment strategies

- Macro trends shaping global finance

- Interviews with industry leaders and market experts

Subscribe now on Spotify to never miss an episode: https://open.spotify.com/show/1AVhofAsVGoyC1xeIUda9K?si=4vjGpUrVQhS_KMboAsFUmg

Connect with us and learn more:

LinkedIn: https://www.linkedin.com/company/fixed-floating/

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