Pimco Sees Pendulum Swinging to Investors as Capital Tightens
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Credit CIO Mark Kiesel says companies `have had it easy’
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Firm likes U.S. company bonds in Goldilocks environment
When the Federal Reserve raises rates and the cost of capital increases, corporate bond issuers will have to instate covenants and protections for buyers that have fallen to the wayside in recent years, according to Mark Kiesel, the chief investment officer for global credit at Pacific Investment Management Co.
“Companies have had it easy for the last several years,” and “you’re seeing companies increasingly test the markets” for what bond buyers will accept in a deal, he said in an interview Wednesday at the Morningstar Inc. exchange-traded fund conference in Chicago. “As capital tightens, you’ll start to see bondholder rights resurface. The pendulum is going to shift from issuer to investor,” which will “allow Pimco and other investors to capitalize on higher rates, higher spreads, and more protection.”…
Pimco Sees Pendulum Swinging to Investors as Capital Tightens
