Small-cap US companies are at risk of default as debt comes due and the economy slows, according to Alan McKnight chief investment officer at Regions Bank. “Look at the Russell 2000 — over 50% of those names are non-earners right now. They’re actually unprofitable,” McKnight says in the latest Credit Edge podcast from Bloomberg Intelligence. “There’s a lot of names in that sort of realm that could be on the tipping point, particularly in light of when they have to refinance their debt,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence credit analyst Matthew Geudtner. McKnight sees particular stress on companies exposed to low-income US consumers. McKnight and Geudtner also discuss opportunities in the industrial and defense sectors, including major borrowers like Honeywell and Lockheed Martin. 

<p>Small-cap US companies are at risk of default as debt comes due and the economy slows, according to Alan McKnight chief investment officer at Regions Bank. “Look at the Russell 2000 — over 50% of those names are non-earners right now. They’re actually unprofitable,” McKnight says in the latest Credit Edge podcast from Bloomberg Intelligence. “There’s a lot of names in that sort of realm that could be on the tipping point, particularly in light of when they have to refinance their debt,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence credit analyst Matthew Geudtner. McKnight sees particular stress on companies exposed to low-income US consumers. McKnight and Geudtner also discuss opportunities in the industrial and defense sectors, including major borrowers like Honeywell and Lockheed Martin. </p>

The Credit Edge reviews the top credit news of the week and looks at the week ahead, with in-depth research of the most important corporate sectors, trends and themes. Analysis of specific corporate bonds and credit default swaps is backed by Bloomberg Intelligence's robust data sets and indexes.

<p>The Credit Edge reviews the top credit news of the week and looks at the week ahead, with in-depth research of the most important corporate sectors, trends and themes. Analysis of specific corporate bonds and credit default swaps is backed by Bloomberg Intelligence's robust data sets and indexes.</p>

The Credit Edge by Bloomberg Intelligence

Junk Defaults May Rise on Small Cap Pain, Says Regions

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/9a63d86e-d545-47f1-bb29-b1b800fcde1c/transcript

Advertisement