Daniel Zwirn, CEO of Arena Investors, per the below quote from a Bloomberg interview posted this morning, sees it as well: emphasis mine...
"What are the most concerning parts of the credit market?"
"It’s super hard to predict when markets will start to
explode and how it’ll start. But certainly, leveraged lending and the associated middle-market corporate private credit markets have been grossly out of control, in partnership with private equity. So the equity pays 11 times because they can get their returns since they’re borrowing 7 or 8 times and lenders are saying it’s going to be OK because there’s someone with 3 or 4 turns below me. And each of them is wrong. And that is going to end badly.
I think the CLO craze is what I just said on steroids –
because you’re doing that and then you’re 19 times levered. And so it is possible that recoveries on those things might not be as bad as we might think, but along the way it’ll be rough."