No. of Recommendations: 3
given, every brookfield RE default gets global headlines.
in the current environment, the only group shakier than retail equity investors are lenders, right?
yet,this does not seem generally be the case for brookfield.
"What would you guess a B+ rated company that is PE owned, net leverage of 5.5x, EBITDA of $1.7B and about $10B in debt outstanding would price $3.5B in loans and bonds in today's sort of market? It's an unfair question because that is not enough information.
Clarios is a Brookfield owned carve-out from Johnson Controls that sells car batteries for ICE and next generation vehicles. Last week it priced $2.75B in term loans at S+375 and senior secured bonds at 6.75%. All in pricing for the package was about 7%. Keep in mind for issuers in the $250M zip-code and below, loans are going out at around S+700 (perhaps B/B- issuers).
...CCC debt is trading somewhere north of S+1000, in some cases far north of that. Until EBITDA turns materially negative across the board (a real recession), we're just shaking out some players that happened to be swimming naked, not throwing out the proverbial babies with the bathwater. Clarios is case in point of great pricing for well situated junk issuers."
https://reddeerinv.com/the-portcos-are-alright/ 