A Tiny Fund Takes a Big Short on Corporate Debt Maturity Wall

The notion that defaults will rise as ultracheap bonds issued in the Covid-19 era expire is nothing new. But Schwartz says yields aren’t pricing in the potential for a bigger-than-expected jump in bankruptcies. Things look especially bad, he says, when you consider that much of the debt was borrowed on terms that minimize the amount that investors are able to recover if companies default.