At The Deal's Fifth Annual Private Capital Symposium, Michael Zupon, a managing director at the Carlyle Group, shared his insights on the leveraged finance markets.
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"We think we've moved from a technically driven market to one based more on fundamentals," Zupon said. "The sell-side, after having to go begging for bids in the first quarter, is now able to play coy with buyers."
Nevertheless, things are still far tighter than in 2007.
"The cost of capital is higher today than it was a year ago, and it's only going to come down slowly," he speculated. "The next six months are really going to be critical, since we'll find out whether we're in a recession or not."
Zupon also had some kind words for the Federal Reserve.
"What the Fed did at the end of the first quarter was brilliant. In the first quarter, they really started to key in on what the real issues were," he said. "[The Fed] seems to have solved the liquidity problems, and that's allowing the buyers to adjust and determine where there really is fundamental value." - George White
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