Carlyle, KKR, Oaktree get ready to snatch up bargain loans- Bloomberg News

What happened

Bloomberg News reported that Carlyle, KKR and Oaktree are preparing to buy loans at bargain prices, according to a Reuters item that said it had not verified the story and did not vouch for its accuracy.

Confirmed

Global impact / market context

If Carlyle, KKR and Oaktree buy loans at discounted prices, they could gain if loan values recover later. They may also be better placed to raise new money from investors, while sellers get cash and shrink their holdings.

Analyst inference

Bargain loan buying usually appears when holders want to sell quickly and prices fall below face value, which means the amount the borrower must repay. Demand from large fund managers can support prices and affect how easily other investors can sell.

Analyst inference

What to watch

1. Check whether Carlyle, KKR or Oaktree confirm any loan purchases or comment publicly on the Bloomberg News report about preparing to buy bargain loans. Confirmed
2. Watch for details on which loans Carlyle, KKR and Oaktree target, the prices they pay and how much investor capital they plan to commit to these purchases. Proposed
3. Track whether other large fund managers also seek discounted loans, since wider buying could lift loan prices and reduce the bargain discount these three firms hope to capture. Analyst inference

Evidence

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