LOS ANGELES, April 28, 2021 / PRNewswire / – In a new research paper, Robert cohen, CFA, Director of the Global Developed Credit team at DoubleLine Capital LP, studies the impact of Special Purpose Acquisition Companies (SPACs) on target companies and their indebtedness before and after the targets merge into SPAC.
While the proliferation of SAVS in 2020 and this year has raised legitimate concerns about the risks to equity investors, Cohen found that the SAVS target companies in his study generally emerged after the merger in financial condition. stronger, an improvement that was reflected in the credit quality. of their debt.
“Target company debt prices have appreciated by up to 4% after an SPAC announced a target company,” Cohen writes. “In addition to price increases, credit investors benefit from significant deleveraging (i.e. enhanced solvency) and a new injection of liquidity into the target company (i.e. – say better liquidity). Credit investors should be on the lookout for bonds trading below their sell-price control or below par loans that may benefit from a PSPC transaction. “
The document, entitled “SPAC Impact on Leveraged Finance Markets”, can be viewed at this link: https://doubleline.com/wp-content/uploads/SPAC-Impact-on-Leveraged-Finance-Markets_Cohen_April-2021.pdf
Robert cohen, CFA, is a portfolio manager and director of DoubleLine’s Global Developed Credit (GDC) team. The GDC team invests in US corporate credit, including investment grade and investment grade bonds and bank indebtedness. Mr. Cohen is also a permanent member of the Fixed Income Asset Allocation Committee. Prior to joining DoubleLine in 2012, Mr. Cohen was a senior credit analyst at West Gate Horizons Advisors (and its predecessor ING Capital Advisors), where he worked as an analyst covering bank loans and high yield bonds. Prior to ING, he was Deputy Vice President of Union Bank’s Asset Management Group, where he managed a diversified portfolio of leveraged loans as well as a portfolio of secured debt securities. Prior to Union Bank, he was Associate Director of Corporate Banking and Investment Services at the Bank of Montreal in its natural resources group. Mr. Cohen holds a BA in Economics from the University of Arizona and an MBA from the University of Southern California.
About DoubleLine Capital LP
DoubleLine Capital LP is a registered investment adviser under the Investment Advisers Act of 1940. The offices of DoubleLine can be contacted by telephone at (213) 633-8200 or by e-mail at [email protected]. Since the March, 31st end of the first quarter of 2021, DoubleLine Capital LP and its related entities, including DoubleLine Alternatives LP (“DoubleLine”), managed $ 135 billion in assets in all vehicles, including open-end mutual funds, collective investment trusts, closed-end funds, exchange-traded funds, hedge funds, variable annuities, UCITS and segregated accounts. News media can reach DoubleLine by e-mail at [email protected]. DoubleLine® is a registered trademark of DoubleLine Capital LP.