JPMorgan’s Aronov Sees More Junk Firms Struggling to Repay Debts

Overview

JPMorgan Asset Management is buying hedges against credit market losses as risks rise and spreads tighten. “There’s value in shorts and credit protection,” Oksana Aronov, the company’s head of market strategy for alternative fixed income, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jody Lurie in this episode of the Credit Edge podcast. “It is very undervalued today because of the complacency in the market,” says Aronov, referring to the high-grade credit default swap index. Aronov and Lurie also discuss the increasing amount of bond and loan interest being repaid with additional debt, dwindling recovery rates, private debt convergence and high-grade opportunities.