Making Hay While The Sun Shines

How to make the most of resilient capital markets and an extended runway

Overall, the U.S. economy has performed stronger than many expected in 2023, and the Fed may be close to pulling off its elusive "soft landing," bringing inflation under control while avoiding a recession.

The strong economy and capital markets have been a boon to both consumers and corporates. Credit markets, even for lower-rated companies, have been resilient over the past few months and sponsors continue to get deals done. Refinancing activity, distressed exchanges, and liability management exercises have pushed out many of the normal liquidity and debt wall triggers that lower-rated credits would otherwise face. Double-dips, drop-downs, and other creative financing tools are being used with increasing frequency, buying both time and optionality.