The hottest Corporate Debt Substack posts right now

Big tech's huge, interconnected AI spending creates concentrated financial risk that could hurt ordinary investors, pensions, and insurers if revenues don't materialize.
Much of the funding comes from private credit, off‑balance‑sheet deals and asset‑backed securities. That channels pension and insurance money into risky AI projects without beneficiaries' direct choice.
Data centers and GPUs face real physical and valuation risks — overbuilding, tech obsolescence, local opposition, and uncertain long‑term demand — which could leave assets stranded and wipe out expected returns.

A top private credit firm admitted that most valuation marks in the private markets are wrong.
They estimated that loans to a typical leveraged mid-size software company might only recover about 20 to 40 cents on the dollar if things go south.
That blunt warning suggests private market valuations are likely overstated and investors could face much bigger losses than current marks imply.

Illiquid private loans can go from being valued at full price to worthless very quickly because they’re priced by internal models instead of daily market bids.
A lot of pandemic-era, highly leveraged e-commerce rollups are failing as interest rates rise and demand softens, creating real borrower distress and loan defaults.
Multiple sudden write-downs plus growing investor redemption requests could force a rapid, broader repricing of the large private credit market and stress funds built for slow-moving assets.

Turkey is facing a severe currency crisis, primarily due to a drop in the value of the Lira. This situation is made worse by poor business practices and lack of proper regulatory oversight.
Many Turkish companies are mismatching their debts, meaning they borrow in foreign currencies while generating cash flows in the Lira. This creates a big risk for them, especially as the Lira declines.
To prevent future crises, changes are needed. This includes the government not bailing out companies with mismatched debts and banks needing to be more careful about the risks they take when lending money.