Liability management exercises may offer a quick fix for financially distressed companies, but they can sometimes make bad situations worse, underscoring the importance of rigorous credit research and security selection.

How can community banks remain competitive and avoid consolidation? One solution is to add variable-rate senior secured commercial and industrial loans to their portfolios.

While high starting yields should provide a buffer against potential volatility, credit selection will be critical as dispersion within and across sectors increases.

Highlights from the week of May 17 – May 23, 2024.