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JPMorgan's Aronov Sees More Junk Firms Struggling to Repay Debts
JPMorgan's Aronov Sees More Junk Firms Struggling to Repay Debts

Bloomberg

time11-07-2025

  • Business
  • Bloomberg

JPMorgan's Aronov Sees More Junk Firms Struggling to Repay Debts

JPMorgan Asset Management is buying hedges against credit market losses as risks rise and spreads tighten. 'There's value in shorts and credit protection,' Oksana Aronov, the company's head of market strategy for alternative fixed income, tells Bloomberg News' James Crombie and Bloomberg Intelligence's Jody Lurie in this episode of the Credit Edge podcast. 'It is very undervalued today because of the complacency in the market,' says Aronov, referring to the high-grade credit default swap index. Aronov and Lurie also discuss the increasing amount of bond and loan interest being repaid with additional debt, dwindling recovery rates, private debt convergence and high-grade opportunities.

JPMorgan's Oksana Aronov Sees More Junk Firms Struggling to Repay Debts
JPMorgan's Oksana Aronov Sees More Junk Firms Struggling to Repay Debts

Bloomberg

time10-07-2025

  • Business
  • Bloomberg

JPMorgan's Oksana Aronov Sees More Junk Firms Struggling to Repay Debts

Lower-rated companies paying more interest with new debt is a sign of rising credit stress as interest rates stay high and earnings decline, according to JPMorgan Asset Management's Oksana Aronov. So-called payment-in-kind — an arrangement that allows companies to pay interest with principal instead of cash — has jumped to nearly 9% of high-yield bond and loan interest payable globally, from about 4% in 2020, according to the firm's head of market strategy for alternative fixed income. Aronov says PIK is prevalent at retail companies, but also widely used in other industries, and she expects it to spread further to other sectors this year.

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