Hello. Here is Aaron Weinman. The Bond King has spoken! Jeffrey Gundlach, CEO of DoubleLine Capital, is convinced that a recession is on its way in 2023.
But not everything is gloomy. He loves the look of lower rated investment grade securities, specifically those rated triple B. He also fantasizes about double B bonds, the highest grade in the high-yield market.
These are companies, or sometimes countries, securities that yield much more profit than a higher-rated borrower like Google or Apple, but they do come with risks.
For Gundlach, that risk is worth it, especially with higher short-term interest rates. Borrowers living in the triple or double B spaces will have to make more expensive interest payments in the coming months.
Insider’s Hayley Cuccinello heard from the outspoken billionaire at an event in Huntington Beach, California. Check out her story here.
And happy Friday, readers. it’s time for Banker of the week!
1. Jeffrey Gundlach of DoubleLine Capital has a thing for bonds. Although it is believed that a recession is about to happen, it is not all bleak for the billionaire.
Sharing his playbook on the bond market, he believes the place for double-digit growth for investors is between the lines of investment grade and sub-investment grade markets.
Gundlach recommended buying securities rated Double B (the highest level of non-investment grade) and Triple B (the lowest investment grade level).
He admitted that there is a risk in this strategy, but it is not enough to prevent him from devouring these securities. He said the move could yield the investor a return of up to 12%.
Helped by an environment of rising interest rates. Securities and loan bond repayments will become more expensive for those with floating rate repayment schedules.
Gundlach spoke at the Future Proof Festival. Read the full story here.
in other news:
2. Adobe agreed to buy Figma for $20 billion. Investors believe Adobe has overpaid for Figma, the company’s market capitalization More than 30 billion dollars. Allen and Company advised Adobe, Wachtell, Lipton, Rosen & Katz served as legal counsel. photoshop maker. The deal is also one of the largest startups backed by the project. Early investors such as Greylock and Kleiner Perkins Stand up for the big win.
3. The Ethereum integration has finally arrived. The Ethereum blockchain integration will move from a Proof of Work validation system to a Proof of Stake system. Fifteen crypto CEOs and founders share their thoughts on what it means digital assets space.
4. Bloomberg reports that Apollo is appealing directly to bond investors to fund mergers and acquisitions as banks reduce risk to buyouts of private equity firms. Barclays and Deutsche Bank are selling bonds to Apollo-backed Lottomatica on a best efforts basis. This means that they collect financing from investors without going into debt in their balance sheets.
5. Close to Walmart: Current Accounts. The world’s largest retailer is expected to launch digital bank accounts for its employees and customers, According to Bloomberg.
6. Student loan startup CommonBond quietly ends operations. The interest affected the epidemic and the payment stopped significantly Core business of refinancing.
7. NextEra Energy sold $2 billion in stock units to Citi, Goldman Sachs and Mizuho. The deal, which is priced at $50 per unit, is one of the largest in the capital markets in recent months, with an influx of deals slowed down to a drop.
8. Companies like Zoom and Roku are giving away more shares to attract talent, but this could weaken existing shareholders. Insider put together a chart highlighting some of the tech companies with Most Expensive Equity Compensation.
9. Wealthy people take the concept of telecommuting to the next level. Demand for private islands has skyrocketed since the outbreak of the pandemic. Here are four special islands For sale in the Bahamas.
10. Here’s the banker on Friday for the week. Meet Graham Weaver, founder and CEO of Alpine Investors, a private equity firm focused on software and services companies.
Weaver brought up the idea for Alpine in the dorm room at Stanford Business School in 2001. He began borrowing against his credit card to invest in businesses. Today, the company manages $8 billion in assets.
Curated by Aaron Weinman in New York. Tips? E-mail email@example.com or tweet @aaronw11.