A New York hedge fund is making a $1 billion bet on more bond market pain
CNBC
The WSJ reports that Perry Capital is shorting debt issued by ten companies. The report didn't specify which companies, but it said that the fund's short bet includes owners of commercial real estate and telecom companies.
For the trade, the fund purchased credit-default swaps (CDS) on the bonds at a cost of about $10 million per year, the report said.
The hedge fund stands to profit handsomely if the companies are downgraded by ratings agencies.
Investment-grade bonds have a rating of BBB or higher by Standard & Poor's or Baa3 or higher by Moody's. They're company's seen as having the safest balance sheets. If they're downgraded, it could be a bigger sign about the overall health of the economy.
Last year, Perry Capital's flagship lost about 12%, according to the Financial Times. The 96-person firm also cut 20 of its staff as the fund was hit with redemptions.
We've reached out to Perry for comment.
To read the full Wall Street Journal story click here
- In second consecutive week of decline, forex kitty drops $2.28 bn to $640.33 bn
- SBI Life Q4 profit rises 4% to ₹811 crore
- IMD predicts severe heatwave conditions over East, South Peninsular India for next five days
- COVID lockdown-related school disruptions will continue to worsen students’ exam results into the 2030s: study
- India legend Yuvraj Singh named ICC Men's T20 World Cup 2024 ambassador
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market