A Distressed-Debt Titan Sees Drought Ending in $1 Trillion Flood
- Oaktree’s CEO says firm is investing with extra caution
- Lack of covenants will spur sudden jump in troubled assets
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Oaktree Capital Group’s Jay Wintrob expects to see a flood of troubled credits topping $1 trillion as rising interest rates overwhelm low-quality loans and bonds.
When the cycle turns it will be faster and larger than ever as “fallen angels” proliferate, said Wintrob, Oaktree’s chief executive officer, at the Bernstein Strategic Decisions Conference on Thursday. “There will be a spark that lights that fire,” he said.