80% of the leveraged finance market does not have a maturity until 2026 or beyond, so they have a lot of runway, a lot of liquidity, you got a well telegraphed recession as you talked about, they are cutting expenses and conserving cash. They are well set up to buy themselves time to see how this market unfolds…you just don’t have that crunch. We are coming off the greatest financing wave in history and so maturity has been pushed out and this plays out in that 80% stat I referenced. 

Eoin Treacy's view

This is one of the most important topics in the debt markets today. Higher rates are obviously troubling for the holders of debt but you don’t get system problems until the borrowers have to pay to refinance and struggle.

Leveraged loan total returns continue to hit new highs. That’s particularly impressive when compared to the sharp underperformance the sovereign debt markets over the last year.

This data also contrasts sharply with commercial property defaults by major private equity firms who have deemed the risk of default preferrable to continuing to make payments.
The US high yield spread has now encountered resistance in the region of the 200-day MA
EU high yield spreads have collapsed as a worst case scenario was avoided for the European economy.

Every recessions delivers surprises but there is a good chance the next contraction will not be on the same scale as the 2008 or 2020 scares.