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Oaktree’s Marks Urges Caution as Money Flows Into Junk Loans

The head of the world’s largest distressed debt fund is emphasizing the need for making careful choices as loan funds inundated with unprecedented cash enable junk-rated companies to borrow at cheaper rates.

“When things are rollicking and the market is permitting low-quality issuers to issue debt, that’s when you need a lot of caution,” Howard Marks, the founder and chairman of Oaktree Capital Group LLC, said in a telephone interview. “You have to apply a lot of discernment.”