Loan-market datapoint of the day
Vipal Monga breaks down the wall of debt which is going to mature over the next few years; I thought it was chartifying.
Given that historically most loan issuance has been turned into CLOs, and given that the CLO market is very unlikely to come back for the foreseeable future, there’s a lot of scope for bad news here as far as the banking sector is concerned. Remember that the stress tests only went out through 2011; they didn’t include the big spike in loan maturities, and the inevitable spate of defaults and restructurings that will result. Or, to put it another way, things are going to get worse before they get worse.