| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
CrossingBridge Advisors expresses deep skepticism about the AI infrastructure buildout, comparing it to historical boom-bust cycles in canals, railroads, and telecom where genuine technological revolutions destroyed enormous investor capital despite ultimate economic importance. AI-related revenue was roughly $25B against over $250B of infrastructure spend in 2025, with Goldman Sachs estimating the industry would need over $1 trillion in annual profit to justify current spending levels. The manager increased allocation to investment grade credit and dry powder over the past twelve months as credit spreads remain tight and valuations appear overextended. Despite concerns, they invested selectively in PolarDC Finance for a 93MW Norwegian data center at EURIBOR + 600 bps, viewing Norway's renewable power and cool climate as structural advantages. They also purchased Oracle bonds at elevated spreads, Warner Bros Discovery term loans ahead of the Paramount merger, Spirit Airlines equipment trust certificates ahead of liquidation, and Evoke debt ahead of the Bally's acquisition. The manager emphasizes that dreams may reach the stars but returns remain grounded in economics, favoring disciplined credit selection with strong structural protections over thematic momentum.
CrossingBridge Advisors maintains a cautious, value-oriented approach to credit investing, emphasizing that while technological frontiers like AI and space may be real and transformative, investment success requires rigorous analysis of economics, competition, and capital structure rather than visionary narratives alone.
The manager remains cautious and skeptical about the AI buildout, preserving liquidity for more attractive opportunities while committing capital only where spreads and structure offer sufficient compensation for risks assumed. They continue to favor investment-grade credit over high-yield given tight spreads and modest yield pickup, while remaining open to select high-yield opportunities. The manager emphasizes that dreams may reach the stars but returns remain grounded in economics, drawing parallels to historical boom-bust cycles where genuine technological revolutions destroyed enormous investor capital despite ultimate economic importance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 23 2026 | 2026 Q2 | EVOK.L, ORCL, SAVE, TSLA, WBD | AI Infrastructure, Cautious, credit, Data centers, high yield, investment grade, Spreads, Valuations |
ORCL WBD SAVE EVOK.L |
CrossingBridge Advisors remains deeply skeptical of the AI infrastructure boom, drawing parallels to historical boom-bust cycles that destroyed investor capital despite technological importance. They increased investment grade allocation and dry powder as spreads tightened, while selectively investing in Norwegian data center debt, Oracle bonds at dislocated spreads, and event-driven credits including Warner Bros Discovery, Spirit Airlines, and Evoke. Returns remain grounded in economics, not visions. |
| Apr 28 2026 | 2026 Q1 | - | AI, credit, energy, Geopolitical, infrastructure, liquidity, oil, private credit | - | CrossingBridge warns against confusing abundant liquidity with durable value as oil markets show extreme backwardation, AI infrastructure demands massive capital, and private credit faces structural repricing. Manager emphasizes that when markets pay premiums for immediate delivery over financial claims, liquidity is becoming scarce and old rules of price and discipline matter more than ever. |
| Feb 4 2026 | 2025 Q4 | BALY, GRUB | AI, credit, DIP, distressed, fixed income, high yield, Leveraged Loans, Nordic | - | CrossingBridge delivered top-tier risk-adjusted returns while navigating the seventh most disruptive period in 200 years. Fed cuts created bull steepener driving alternative demand as money markets fell to 3.5%. Manager reduces leveraged loans, increases Nordic exposure, and targets DIP financings. Direct lending stress mounting with rising defaults. Maintains patient, defensive approach prioritizing downside protection in expensive markets. |
| Oct 16 2025 | 2025 Q3 | CODI | Bankruptcy, CLO, credit, high yield, private credit, risk management |
FIRSTB US CODI US |
CrossingBridge warns against yield-chasing in a complacent credit market, using First Brands' bankruptcy as a cautionary tale while opportunistically investing in Compass Diversified Holdings during temporary distress. The firm advocates rigorous credit underwriting amid concerning market conditions reminiscent of 2005-2006, with elevated complacency and weakening lender protections creating systemic risks. |
| Jul 18 2025 | 2025 Q2 | BALY, GLPI | Bonds, Covenants, credit, Fed, gaming, Leverage, Nordic, Stagflation |
BALY STWKSS BALY |
CrossingBridge exploits stakeholder misalignments in credit markets, demonstrated through successful Stockwik covenant negotiations and Bally's distressed gaming debt positioning. Manager warns of stagflation risks from fiscal spending and Fed independence concerns. Strategy emphasizes capital preservation and selective senior secured opportunities with strong covenant protection in challenging environment. |
| Apr 24 2024 | 2025 Q1 | WDC | credit, Debt, fixed income, policy, Spreads, Treasury, volatility | WDC | CrossingBridge navigates volatile Q1 2025 conditions driven by Trump policy shifts and $8.5 trillion Treasury refinancing needs. Credit spreads widened from tight levels but remain below recession peaks. Manager maintains selective, defensive positioning while capitalizing on dislocations, successfully exiting Infrabuild and profiting from Western Digital early redemption. Focus remains on capital preservation amid fragile economic environment. |
| Jan 28 2025 | 2024 Q4 | BLDR, LTH, LTRPA, MGNI | credit, fixed income, high yield, loans, rates |
MGNI BLDR LTRPA |
CrossingBridge sees opportunity in historically tight credit markets through active fixed income strategies. Despite high yield spreads at concerning levels reminiscent of pre-GFC, the firm finds value in term loan repricing, defeased bonds, and event-driven situations. Portfolio has shifted toward higher quality while maintaining selective exposure to specialized opportunities in Nordic debt and corporate events. |
| Oct 25 2024 | 2024 Q3 | AUD, BA, WBA | Bankruptcy, credit, high yield, Nordic, Quality, Spreads, value |
BA WBA AUD MSGPIN |
CrossingBridge applies value investing principles to credit markets, focusing on higher quality opportunities given historically tight spreads. The manager expects credit migration to turn negative and positions defensively while pursuing floating rate debt, foreign issuers, and event-driven situations. Recent investments include post-bankruptcy Audacy and specialty chemicals company M2S Group, while avoiding or shorting lower-quality credits like Boeing and Walgreens. |
| Jul 19 2022 | 2024 Q2 | CROX, DISH, PARA, SATS | credit, Event-Driven, floating rate, Foreign, high yield, investment grade | - | CrossingBridge navigates tight credit spreads and inverted yield curve through four themes: floating rate debt, foreign issuers, event-driven opportunities, and investment grade securities. Portfolio spans AAA-rated securitizations to European floating rate notes. Manager emphasizes sophisticated positioning required in challenging environment where risk appears mispriced across asset classes. |
| Apr 24 2024 | 2024 Q1 | CBLDX, CBRDX, CBUDX, RSIIX | credit, fixed income, high yield, rates, Refinancing, Spreads | - | CrossingBridge sees credit spreads at dangerously tight levels, undercompensating for rising bankruptcy risk as filings doubled since 1Q22. The firm emphasizes defensive positioning in senior secured debt while maintaining dry powder for post-restructuring opportunities and Nordic market investments offering superior risk-adjusted returns versus US credit markets. |
| Jan 19 2024 | 2023 Q4 | CCO, IEP, NGL, TPG, WBD | CMBS, credit, distressed, fixed income, rates, value | - | CrossingBridge employs disciplined value investing in fixed income, targeting companies that can generate cash flows to meet obligations. The firm sees fixed income markets underpricing risk with tight credit spreads. Portfolio focuses on misunderstood investment-grade debt, CMBS, and event-driven opportunities while maintaining cash when risk compensation is inadequate. Patient approach emphasizes bottom-up opportunities over macro predictions. |
| Dec 10 2023 | 2023 Q3 | NGL | CMBS, credit, distressed, energy, high yield, Midstream, private credit, Securitizations | - | CrossingBridge advocates disciplined credit selection over chasing fat pitches. The firm outperformed Treasuries through active management while reducing energy E&P exposure and focusing on single-A CMBS. Manager expresses skepticism about distressed opportunities and private credit hype, emphasizing methodical individual credit analysis to generate consistent returns rather than swinging for home runs. |
| Jul 20 2023 | 2023 Q2 | - | Clos, credit, high yield, interest rates, Leveraged Loans, Liability Management | - | CrossingBridge sees opportunity in credit market disruption as CLOs enter harvest periods and borrowers face maturity walls. They favor leveraged loans over CLO formation decline and high floating-rate yields, maintaining elevated cash for deployment. Expect slower-burn distressed cycle with liability management transactions creating selective opportunities in loans and bonds. |
| Apr 21 2023 | 2023 Q1 | GETY, TLN | Banking, Commercial real estate, credit, distressed, fixed income, rates | ATLN.L | CrossingBridge sees commercial real estate as the next crisis with $1.4 trillion refinancing wall through 2025. Rising rates from zero to 5% expose weak capital structures across credit markets. Manager positions in floating rate debt expecting higher rates to persist and focuses on secured credit with strong protection including Getty Images and Talen Energy bonds. |
| Feb 17 2023 | 2022 Q4 | - | - | - | |
| Oct 26 2022 | 2022 Q3 | CCO, FIVENA, GDDY, GIII, IEP, SSW | - | - | |
| Jul 19 2022 | 2022 Q2 | 0OHK LN, ISAT LN | - | - | |
| Apr 18 2022 | 2022 Q1 | CHO, GLNG, TFM | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe manager expresses deep skepticism about the AI buildout, comparing it to historical boom-bust cycles in canals, railroads, and telecom. They note that AI-related revenue was roughly $25B against over $250B of infrastructure spend in 2025, and that Goldman Sachs estimates the industry would need over $1 trillion in annual profit by 2026 to justify current spending levels. Despite concerns about returns on investment, competitive moats, and the risk of obsolescence, they invested selectively in one AI infrastructure financing in the Nordic market with acceptable terms. |
Data Centers Infrastructure Hyperscalers Buildout |
Data CentersThe manager invested in PolarDC Finance, a 93MW data center buildout in Norway with anchor tenants Crusoe and CoreWeave. They view Norway as offering structural advantages including abundant renewable power, cool climate for cooling efficiency, and supportive government policy. They benchmarked this against Applied Digital bonds and found superior terms and yield, with stricter covenants and a spread pickup of roughly 334 bps for equivalent or lower risk. |
Norway Renewable Power CoreWeave Infrastructure | |
Credit StressThe manager notes that credit spreads remain tight and valuations appear overextended. They have remained cautious, increasing allocation to investment grade credit, reducing exposure to high yield, and adding to dry powder over the past twelve months. The relatively modest yield pickup for moving down in credit quality has made much of the high-yield market less compelling, leading them to favor investment-grade credit while remaining open to select high-yield opportunities. |
Spreads Valuations High Yield Investment Grade | |
SpaceThe manager discusses SpaceX's IPO at a $1.75 trillion valuation and Elon Musk's vision of space-based industry harnessing 100,000 times the power generated on Earth today. They note Musk's shift in priority from Mars to a self-growing city on the Moon with tens of thousands of residents within ten years. While acknowledging that history cautions against dismissing such visions, they emphasize that economic importance and investment success are not the same thing, citing Tesla's unfulfilled autonomous driving promises as an example. |
SpaceX Infrastructure Valuation Frontier | |
CloudThe manager invested in Oracle Corporation bonds, viewing ORCL as a high-quality, investment-grade software and cloud infrastructure provider with highly recurring revenue and strong free cash flow generation. They took advantage of a pricing dislocation in short-dated bonds at elevated spreads, believing the market significantly overstated the risk and underappreciated the resilience of the underlying business and robust access to capital markets. Oracle executed a comprehensive financing plan including $25 billion in bonds, $5 billion in preferred equity, and a $20 billion ATM equity program. |
Oracle Infrastructure Software Financing | |
RatesThe manager notes that Kevin Warsh took over as Chairman of the Federal Reserve and, following his first FOMC meeting on June 17, sounded more hawkish on inflation than many investors had anticipated. As of June 30, Fed Funds Futures are implying at least one increase in rates by year end, contrary to earlier expectations that Warsh would echo President Trump's view that the Fed should lower interest rates. |
Federal Reserve Inflation FOMC Hawkish | |
MediaThe manager invested in Warner Bros Discovery's $13 billion first lien secured term loan at SOFR + 250 bps, viewing the risk/reward as favorable regardless of the Paramount merger outcome. If the transaction closes, the term loan requires repayment at par due to change of control provisions. If the merger is terminated, WBD would receive a $7 billion breakup fee, materially reducing leverage, while the loan benefits from first lien claims and guarantees from high-quality assets including studio and streaming businesses. |
Warner Bros Paramount Merger Streaming | |
AirlinesThe manager invested in Spirit Airlines' investment-grade rated 2015-1A 4.100% Enhanced Equipment Trust Certificates due April 2028, secured by 15 Airbus aircraft with approximately 2.0x collateral coverage. After Spirit returned to Chapter 11 and announced liquidation, the manager added to the position and joined an ad hoc group of equipment trust holders. They expect repayment at par plus accrued interest by September 30, 2026, resulting in an annualized return of approximately 13%. |
Bankruptcy Liquidation EETC Collateral | |
| 2026 Q1 |
OilOil markets show extreme backwardation with dated Brent trading 13.8% above front-month futures as of March 31, reflecting premium for immediate delivery amid supply disruption from Middle East conflict. The market is paying up for barrels on the water versus paper claims, indicating liquidity stress beyond energy markets. |
Brent Backwardation Supply Hormuz Geopolitical |
AIAI requires massive capital for power, chips, data centers, and infrastructure despite being portrayed as weightless software. While technology is improving rapidly and will drive efficiency gains, markets may be overestimating returns and underestimating capital intensity. Valuation multiples for AI leaders invite comparisons to early Amazon and Google. |
Infrastructure Capital Valuations Data Centers Power | |
Private CreditBDCs have sold off meaningfully while investment grade and high yield bonds remained steady, suggesting market repricing of structure rather than broad credit collapse. Private credit offers illiquidity premium but faces sector concentration risk in technology and software credits amid changing business models. |
BDCs Illiquidity Technology Software Structure | |
LiquidityMarkets are repricing liquidity itself as supply chains face threats and immediate physical delivery becomes scarce. When markets separate financial exposure from physical access, liquidity becomes more valuable and harder to take for granted across asset classes. |
Scarcity Physical Financial Premium Access | |
| 2025 Q4 |
AIManager believes market's assessment of AI risk differs from their own, with approximately 60% of underperformance attributed to positions where AI impact concerns drove stock declines. Portfolio companies deemed AI-losers declined 15% despite 10% revenue growth and 15% EPS growth, representing valuation compression rather than fundamental deterioration. |
Artificial Intelligence Disruption Valuation Technology Software |
QualityFund exclusively invests in businesses with superior characteristics including high barriers to entry, sustainable competitive advantages, and durable growth prospects. Manager notes their focus on leading businesses in sectors has been foundation of strategy since inception, though this approach was out of favor in 2025 as investors sold higher-quality investments to buy riskier stocks. |
High Quality Competitive Advantages Barriers to Entry Sustainable Growth Market Leaders | |
Small CapsStrategy of owning competitively advantaged small and medium-sized businesses remained out of favor for most of the quarter. Fund observed improvement in early December as investors showed renewed enthusiasm for high-quality stocks that populate the portfolio, with significant divergence between consistent earnings growth and recent performance creating compelling valuations. |
Small Cap Medium Cap Growth Valuation Performance | |
| 2025 Q3 |
Credit StressThe First Brands Group bankruptcy demonstrates how sophisticated investors can underestimate credit risk when chasing yield. The company's debt fell from mid-90s to mid-30s in days, exposing CLOs to $2.2 billion in losses and highlighting the dangers of overleveraged companies with opaque financial reporting. |
Bankruptcy CLO Leverage Default |
Private CreditPrivate credit lenders including BDCs were exposed to approximately $276 million in First Brands debt and experienced sharp mark-to-market losses. The case illustrates risks in the private credit market where supposedly sophisticated lenders can still get caught in credit deterioration. |
BDC Mark-to-market Losses Exposure | |
Risk AppetiteThe market is exhibiting irrational complacency with investors accepting narrower credit spreads, bearing lower liquidity, tolerating weaker lender protections, and taking shortcuts in credit underwriting. This mirrors conditions from 2005-2006 when models suggested negative future returns adjusted for credit losses. |
Complacency Spreads Underwriting Liquidity | |
| 2025 Q2 |
Credit StressManager discusses distressed credit opportunities in companies like Bally's trading at elevated yields due to structural complexity and perceived misalignments. Focus on senior secured debt with strong covenants as protection against credit deterioration. |
Distressed Covenants Secured Yields Leverage |
Capital MarketsExtensive discussion of bond markets, covenant structures, and credit agreement negotiations. Manager emphasizes importance of well-structured covenants in Nordic markets versus covenant-lite structures in US markets. |
Bonds Covenants Refinancing Credit Structures | |
CasinosDetailed analysis of Bally's Corporation gaming business, including regional casino operations, iGaming assets, and complex capital structure. Manager views gaming assets as providing stable cash flows despite headline leverage metrics. |
Gaming Regional iGaming Entertainment Leverage | |
InflationManager warns of potential stagflation risks from continued government spending, tariffs raising costs, and lackluster productivity growth. Fed faces difficult balancing act between growth and price stability. |
Stagflation Fed Monetary Productivity Tariffs | |
| 2025 Q1 |
Credit StressCorporate credit spreads have widened toward long-term averages from historically tight levels, though they remain well below recessionary peaks. The manager emphasizes being especially discerning with investment selection as economic fundamentals may continue weakening toward recessionary territory. |
Credit Spreads Investment Grade High Yield Recession Risk Corporate Bonds |
Trade PolicyThe Trump administration's tariff policies are viewed as potentially triggering a recession, with Commerce Secretary Howard Lutnick stating tariffs would be worth it even if they caused economic contraction. The manager warns that tariffs can trigger trade wars and abrupt policy shifts can erode global trust. |
Tariffs Trade Wars Policy Risk Economic Impact Global Trust | |
VolatilityThe manager anticipated rising volatility heading into 2025, which has materialized due to Trump administration's rapid-fire policy shifts. Volatility exposes weaker companies that may not survive stress while creating opportunities through temporary mark-to-market moves versus lasting impairments. |
Market Volatility Policy Uncertainty Risk Management Market Stress Opportunity | |
RatesThe US Treasury needs to manage approximately $8.5 trillion in maturing debt in 2025, nearly 30% of total national debt. Treasury Secretary Bessent describes the refinancing approach as path dependent on inflation, interest rates, and investor willingness to lend without panicking. |
Treasury Debt Interest Rates Refinancing Inflation Debt Management | |
| 2024 Q4 |
Credit StressHigh yield credit spreads are historically tight at 292 bp, 132 bp tighter than fair value according to econometric models. Manager sees parallels to 2005-06 pre-GFC levels and warns that overvalued asset classes can become more overvalued but questions sustainability. |
Credit Spreads High Yield Overvaluation Fair Value Risk Premium |
RatesThe yield curve has un-inverted after being inverted for 793 days, the longest in history. Term premium has risen from -0.33 to 0.49 but remains below historical averages. Manager expects the curve to remain normalized and steep. |
Yield Curve Term Premium Duration Risk Fed Policy Interest Rates | |
Private CreditTerm loans are acting like cushion bonds as spreads narrow due to CLO demand and active repricing markets. Loans offer 83 bp yield advantage over bonds despite rate declines, with nearly 70% trading at 99 or higher. |
Term Loans CLO Demand Repricing Floating Rate SOFR | |
| 2024 Q3 |
Credit StressHigh yield spreads are at historically tight levels reminiscent of 2005-07, with BBB-BB spreads tighter 70% of the time over 24 years. Credit migration is expected to turn negative, especially considering direct lending markets. The manager anticipates potential credit deterioration ahead. |
Credit Spreads Migration Deterioration Downgrades |
ValueThe letter emphasizes disciplined value investing principles through a four-question rubric: good business, margin of safety, alignment of interests, and capital allocation track record. Manager applies these principles to credit opportunities where value realization should be more straightforward than equities. |
Value Discipline Rubric Safety Principles | |
QualityGiven tight credit spreads, portfolios are leaning into higher quality credit. The manager emphasizes the importance of conservative balance sheets and strong covenant packages to protect against cyclical downturns and credit deterioration. |
Quality Conservative Covenants Protection Standards | |
| 2024 Q2 |
Credit StressHigh yield credit spreads are at their lowest level since 2007, with over 60% of the market trading below 200 basis points. The manager notes this creates a challenging environment where risk is being mispriced across asset classes. Despite tight spreads, credit quality has improved with leverage reduction across the market. |
Credit Spreads High Yield Leverage Risk Pricing Credit Quality |
RatesThe inverted yield curve creates opportunities for floating rate debt, where SOFR is about 100 basis points higher than 5-year Treasury rates. This allows investors to earn higher yields on floating rate securities while providing issuers potential benefits if rates decline. |
Inverted Yield Curve SOFR Floating Rate Treasury Interest Rates | |
| 2024 Q1 |
Credit StressCredit spreads are at historic lows with BBB spreads lower than 92% of monthly periods since 2004 and BB spreads lower than 97% of periods since 2004. Chapter 11 bankruptcy filings have more than doubled since 1Q22 when the Fed began raising rates, stressing companies with high debt levels and floating rate exposure. |
Credit Spreads Bankruptcy High Yield Investment Grade Refinancing |
Capital MarketsRecord high 78% of high yield capital raised year-to-date in 2024 has been used to refinance upcoming maturities. Companies are taking advantage of tight credit spreads while pushing out maturities despite higher interest rates. The surge in new issuance across investment grade, high yield and syndicated bank debt reflects corporate treasurers' prudent moves. |
Refinancing New Issuance High Yield Investment Grade Maturities | |
RatesThe fund continues to take advantage of the inverted yield curve, favoring high income from the short end rather than speculating on Fed rate cuts. Due to yield curve inversion, some companies have arbitrage opportunities to refinance short-dated maturities via defeasance using long-term debt proceeds invested in money market securities. |
Yield Curve Fed Rates Short Duration Defeasance Treasury | |
| 2023 Q4 |
Credit StressFixed income markets are underpricing risk with credit spreads at tight levels. Credit spreads as a percentage of yield-to-worst for investment grade debt was 23% and high yield debt was 43%, the tightest levels since 2005-06. The manager is concerned about future corporate profitability as companies may struggle to maintain pricing power. |
Credit Spreads Risk Premium Corporate Profitability Pricing Power Leverage |
Commercial Real EstateThe fund invests in CMBS rated AA and A with maturities under 3 years that are priced to extension but if paid off at maturity will generate significant yield increases. These securities have spreads equivalent to B/BB high yield despite high quality, low loan-to-value on primarily industrial, distribution and logistics assets. |
CMBS Industrial Distribution Logistics Loan-to-Value | |
RatesThe yield curve is likely to flatten and normalize to an upward sloping curve instead of the current inversion. Fed Funds Futures were projecting seven 25 basis point reductions totaling 175 basis points by end of 2024, contrasting with the Fed's dot plot indicating only 75 basis points of cuts. The manager finds the 3-year or less portion of the yield curve most attractive on a risk-adjusted basis. |
Yield Curve Fed Funds Interest Rates Duration Term Premium | |
| 2023 Q3 |
Private CreditManager provides extensive analysis of private credit market growth and risks. Notes that private credit has grown as banks reduced lending post-GFC, but warns of false sense of stability due to lack of mark-to-market pricing. Emphasizes that the market hasn't experienced a broad default cycle since GFC. |
Private Credit Default Cycle Liquidity Volatility Banks |
EnergyDetailed discussion of energy sector opportunities and risks, particularly in exploration & production and midstream companies. Manager is cautious on E&P credits due to rising leverage and M&A activity, but selectively invests in distressed situations with low leverage. |
Energy Exploration & Production Midstream Leverage Oil | |
Credit StressManager discusses distressed investing opportunities but expresses skepticism about current distressed market. Notes that most distressed candidates are either venture-like businesses running out of capital or mature zombies, making quality opportunities scarce. |
Credit Stress Distressed Default Leverage Workout | |
Commercial Real EstateManager focuses on single-A CMBS securities not exposed to central business district properties. Expects commercial real estate market to take several years to heal and hopes to find opportunities in the future. |
Commercial Real Estate CMBS Real Estate Central Business District Healing | |
| 2023 Q2 |
Credit StressOver 28% of leveraged loans and high yield bonds are scheduled to mature within three years, leading to a sharp rise in liability management transactions and amend & extend agreements. The manager expects this credit stress to manifest as a slower moving, longer lasting distressed cycle compared to previous cycles. |
Leveraged Loans High Yield Defaults Distressed Maturities |
CLOsCLO formation is declining as nearly 40% of existing CLOs are projected to be in their harvest period by end of 2023, and over 50% by end of 2024. This creates pressure on the leveraged loan market as CLOs are the primary purchasers of leveraged loans, representing 67% of the market. |
Collateralized Loan Obligations Harvest Period Reinvestment Structured Products | |
Commercial Real EstateThe manager notes that commercial mortgage-backed securities debt offers better yields than CLO debt with higher credit quality based on loan-to-value ratios. They reference the serious issues in the commercial real estate market with 'extend and pretend' strategies running out of time. |
CMBS Loan-to-Value Extend and Pretend Real Estate | |
RatesFloating rate loans are providing high yields due to the dramatically inverted yield curve. The manager continues to believe that rates will remain higher and for longer than implied by the forward interest rate curve, allowing them to take advantage of mispricing relative to fixed rate debt. |
Interest Rates Yield Curve Floating Rate Fixed Rate | |
| 2023 Q1 |
Commercial Real EstateManager expects CRE to become the poster child for devaluation and decline in credit quality throughout fixed income. Over $1.4 trillion of commercial and non-agency multi-family real estate debt faces refinancing in 2023-25 in a much higher rate environment. Office properties are most at risk due to shift to hybrid/remote work. |
Office Refinancing Devaluation Credit Quality Maturities |
Credit StressRising interest rates are creating a wall of refinancing pressure across asset classes. Companies that took advantage of low rates with aggressive borrowing now face significantly higher costs. The rise in rates reveals unsteady underpinnings of capital structures premised on rates remaining low. |
Refinancing Interest Coverage Debt Maturity Capital Structure Borrowing Costs | |
RatesFed Funds Rate has risen from practically zero to almost 5% to quell inflation. Manager believes rates will remain higher for longer barring systemic risk. The portfolio maintains elevated floating rate debt exposure to capture benefit of market's forward curve mispricing. |
Fed Funds Floating Rate Forward Curve SOFR Interest Coverage |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 23, 2026 | Fund Letters | CrossingBridge Advisors | - | PolarDC Finance (Athomstart Invest AS) | Other | Specialized REITs | Bull | - | AI infrastructure, data center, EURIBOR Floating Rate, investment grade, Nordic Credit, Norway, Real Estate, renewable energy, Senior Secured Bond | Login |
| Jul 23, 2026 | Fund Letters | CrossingBridge Advisors | ORCL | Oracle Corporation | Software - Infrastructure | Systems Software | Bull | New York Stock Exchange | AI investment, BBB-, cloud infrastructure, Free Cash Flow, investment grade, recurring revenue, SaaS, Senior Unsecured Bond, Software, technology | Login |
| Jul 23, 2026 | Fund Letters | CrossingBridge Advisors | WBD | Warner Bros. Discovery | Entertainment | Movies & Entertainment | Bull | NASDAQ | BBB-, Change of Control, entertainment, Event-driven, First Lien Term Loan, investment grade, media, Merger Arbitrage, SOFR Floating Rate, Streaming | Login |
| Jul 23, 2026 | Fund Letters | CrossingBridge Advisors | SAVE | Spirit Airlines | Other | Airlines | Bull | New York Stock Exchange | Aircraft Financing, Airlines, Bankruptcy, Distressed Credit, EETC, investment grade, Liquidation, Overcollateralized, Section 1110, Special situations | Login |
| Jul 23, 2026 | Fund Letters | CrossingBridge Advisors | EVOK.L | Evoke plc (888 Acquisitions Ltd.) | Gambling | Casinos & Gaming | Bull | London Stock Exchange | Europe, Event-driven, Gaming, high yield, M&A, Online betting, Senior secured, SOFR Floating Rate, turnaround, UK | Login |
| Oct 16, 2025 | Fund Letters | David K. Sherman | FIRSTB US | First Brands Group LLC | Other | Auto Parts & Equipment | Bear | Shanghai Stock Exchange | Bankruptcy, Credit, debt, Factoring, leverage, restructuring, risk management, Rollup | Login |
| Oct 16, 2025 | Fund Letters | David K. Sherman | CODI US | Compass Diversified Holdings | Industrials | Diversified Holding Companies | Bull | NYSE | Bondholders, Credit, deleveraging, diversification, leverage, Notes, restructuring, yield | Login |
| Jul 18, 2025 | Fund Letters | David K. Sherman | BALY | Bally's Corporation | Consumer Discretionary | Casinos & Gaming | Bull | NYSE | cashflow, Credit, deleveraging, Gaming, restructuring | Login |
| Jun 30, 2025 | Fund Letters | CrossingBridge Advisors | STWKSS | Stockwik Förvaltning | Financials | Multi-Sector Holdings | Bull | Stockholm Stock Exchange | Bond, Covenant Protection, investment company, Multi-Sector, Nordic, Refinancing, turnaround | Login |
| Jun 30, 2025 | Fund Letters | CrossingBridge Advisors | BALY | Bally's Corporation | Consumer Discretionary | Casinos & Gaming | Bull | NYSE | Casinos, debt repayment, Distressed Credit, Gaming, iGaming, Regional Gaming, Sale Leaseback, Senior secured | Login |
| - | Fund Letters | CrossingBridge Advisors | BA | Boeing | Industrials | Aerospace & Defense | Bear | NYSE | Aerospace, Bear, Credit risk, Criminal Charges, Debt Downgrade, Defense, Fallen Angel, Junk Bond, Safety Issues | Login |
| - | Fund Letters | CrossingBridge Advisors | WBA | Walgreens Boots Alliance | Consumer Staples | Drug Retail | Bear | NASDAQ | Bear, Credit Deterioration, Drug Retail, Fallen Angel, high yield, Opioid Liabilities, PBM Pressure, Pharmacy, Short Position | Login |
| - | Fund Letters | CrossingBridge Advisors | AUD | Audacy Inc. | Communication Services | Broadcasting | Bull | NASDAQ | advertising, Bankruptcy, broadcasting, Bull, Capital-light, Post-Reorganization, Radio, Soros Fund, turnaround | Login |
| - | Fund Letters | CrossingBridge Advisors | MSGPIN | M2S Group | Materials | Specialty Chemicals | Bull | Private | Bull, Leveraged Loan, Pricing power, private equity, specialty chemicals, Sticky Customers, Thermal Printing, vertical integration | Login |
| - | Fund Letters | CrossingBridge Advisors | MGNI | Magnite Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising technology, Connected tv, Credit, digital media, floating rate, SaaS, technology, Term Loan | Login |
| - | Fund Letters | CrossingBridge Advisors | BLDR | Builder's First Source | Materials | Building Products | Bull | NASDAQ | Building materials, construction, Cyclical, Fragmented Market, high yield, Housing, LBO Candidate, M&A Target | Login |
| - | Fund Letters | CrossingBridge Advisors | LTRPA | Liberty TripAdvisor Holdings | Communication Services | Interactive Media & Services | Bull | NASDAQ | Activist Credit, Corporate action, Event-driven, Exchangeable, holding company, Put Option, Special situations, Travel | Login |
| - | Fund Letters | CrossingBridge Advisors | WDC | Western Digital Corp. | Information Technology | Technology Hardware, Storage & Peripherals | Bull | NASDAQ | Bond, Corporate Spin-off, Credit Upgrade, data storage, deleveraging, Enterprise Technology, Hard Disk Drives, high yield, Solid State Drives | Login |
| - | Fund Letters | CrossingBridge Advisors | - | Infrabuild Australia Pty | Materials | Steel | Bull | Private | Australia, Bond, Distressed Credit, Electric Arc Furnace, first lien, high yield, materials, Recycling, Steel, Value | Login |
| - | Fund Letters | CrossingBridge Advisors | ATLN.L | Talen Energy | Utilities | Independent Power and Renewable Electricity Producers | Bull | NASDAQ | Bankruptcy, Chapter 11, Distressed Credit, energy infrastructure, North America, Power generation, restructuring, Secured Bonds, utilities | Login |
| TICKER | COMMENTARY |
|---|---|
| ORCL | ORCL remains a high-quality, investment-grade software and cloud infrastructure provider, characterized by highly recurring revenue and strong free cash flow generation. During the quarter, we took advantage of a pricing dislocation in the company's short-dated bonds, opportunistically buying two of ORCL's short-dated bonds, rated BBB-/Baa2, due 2027, at elevated spreads of +94 to +102 bps—a highly attractive entry point compared to the roughly +49 bps observed at the end of 2025. The credit spread for ORCL's short-term bond, on a spread per turn of leverage basis, is about double that of bonds of similar maturities issued by other investment grade credits in adjacent industries due to market concerns regarding the scale of ORCL's AI-driven investment cycle, its associated funding needs, and broader questions surrounding sector-wide AI capital expenditures. In our view, the market is significantly overstating the risk, underappreciating the resilience of the company's underlying business and its robust access to capital markets. In February, the company directly addressed these concerns by executing a comprehensive financing plan. This included a $25 billion senior unsecured bond issuance, approximately $5 billion in mandatory convertible preferred equity, and the authorization of a $20 billion at-the-market (ATM) equity program. These actions strongly reinforced ORCL's commitment to maintaining its investment-grade balance sheet. We remain confident that the company is exceptionally well-capitalized to easily address its near-term liabilities. |
| WBD | Warner Bros. Discovery is a global media company whose assets include the Warner Bros. film and television studio, HBO Max, and a portfolio of cable networks. Following its previously announced merger with Paramount, the company sought to refinance the $15 billion bridge facility put in place to support prior strategic initiatives. With the legacy bridge becoming increasingly expensive and the merger timeline extending, WBD came to market with a new $13 billion first lien secured term loan, rated BBB-/Baa3, at attractive pricing. We participated in the financing, viewing the risk/reward as favorable regardless of the merger outcome. If the transaction closes, the term loan is subject to a change of control provision requiring repayment at par, allowing us to realize an attractive spread over Treasuries on paper purchased at a discount. If the merger is terminated, we believe the downside would be well protected. WBD would receive a $7 billion breakup fee, materially reducing leverage, while the loan benefits from first lien claims and guarantees from the company's highest-quality assets, including its studio and streaming businesses, which generate sufficient free cash flow to support the credit and have attracted meaningful strategic interest. |
| SAVE | Spirit Airlines emerged from Chapter 11 in March 2025 with reduced debt and new equity. We passed on its mid-teens yielding 11% senior secured notes due 2030 given our view that the reorganized balance sheet remained overleveraged and positive free cash flow generation depended on resolving costly aircraft leases and favorable fuel prices, factors out of the Company's control. Instead, we purchased Spirit's investment-grade rated 2015-1A 4.100% Enhanced Equipment Trust Certificates, or EETCs, due April 2028. The certificates are secured by 15 Airbus A320 and A321 aircraft, which we estimated provided approximately 2.0x collateral coverage. Days after our initial purchase, Spirit returned to Chapter 11. In the ensuing months, fuel price volatility following the outbreak of hostilities in Iran derailed its restructuring. In early May 2026, the company announced it would liquidate. After Spirit missed a principal payment, we added to our position at approximately 96.50, a 6.1% YTM. CrossingBridge joined an ad hoc group of equipment trust holders and entered into a cooperation agreement under which junior EETC holders would credit bid their claims and repay the senior tranches, including the 2015-1As, at par plus accrued interest. |
| EVOK.L | 888 Acquisitions is the debt-issuing subsidiary of publicly traded Evoke plc (EVOK LN), a U.K.-based operator of online and retail gaming brands including William Hill, 888casino, and Mr. Green. Following the debt-financed acquisition of William Hill in 2022, leverage remained elevated, but the turnaround began to take hold in 2024 and leverage fell below 5.0x by 2025, with a credible path towards 3.5x. That progress was interrupted in late 2025 when the U.K. government announced a larger-than-expected increase in remote gaming duties. GAMHOL's debt sold off sharply after Evoke withdrew its medium-term guidance and retained financial advisors to evaluate strategic alternatives. We concluded that the value of these assets covered the debt with a margin of safety, even if they ultimately had to be monetized separately. Liquidity and underlying cash generation also provided a cushion against the tax increase isolated to the U.K. online business. Reports that Bally's-controlled Intralot was considering an acquisition provided an additional catalyst. In early June, Evoke announced an agreement to be acquired by Bally's Intralot. |
| TSLA | Tesla provides a useful example. Musk and many investors have long viewed Tesla as far more than an automobile manufacturer. It has been presented as a future leader in autonomous driving, robotaxis, robotics, artificial intelligence, and energy. Some of that vision has produced meaningful technological and commercial progress. Other parts have fallen short. For example, Musk began predicting fully autonomous Teslas nearly a decade ago and said in 2019 that he was highly confident Tesla would have operational robotaxis in 2020. We are still waiting... Full Self-Driving still requires human supervision. This does not mean the ultimate vision is wrong. Tesla helped turn electric vehicles from a niche product into a global industry. But it does demonstrate the chasm that can exist between identifying the future and accurately estimating the time, capital and competitive advantages required to reach it. |
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