David Einhorn Says He's Short U.S. High Yield, Investment Grade Debt
- Ratings firms have been complacent during credit boom, he says
- Shorting credit hedges long stock positions, Einhorn says
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Hedge fund manager David Einhorn says that he’s shorting U.S. corporate debt as protections for creditors deteriorate.
His firm Greenlight Capital is wagering against both junk and investment grade debt, according to an investor letter seen by Bloomberg. The macro position will provide a hedge for the firm’s bullish equity positions in addition to being an attractive, standalone bet, the letter said. The cost of taking such a position is “quite low” as credit spreads tighten, according to the letter.