Danielle Poli, managing director and co-portfolio manager at Global Credit Oaktree Capital Management, has indicated that credit trading currently feels "orderly." However, she also suggests that the most substantial opportunities for price movement in global credit markets have not yet arrived. Poli notes that while present opportunities exist, the firm anticipates bigger opportunities "further down the line," as there hasn't been a significant market selloff.
Despite the current perceived orderliness, Poli foresees a "distressed moment" approaching, driven by sustained high interest rates and a looming "maturity wall." She highlighted that $200 billion in corporate debt is particularly vulnerable as funding costs remain elevated and these debts mature over the next few years. This perspective aligns with Oaktree's focus on distressed debt, suggesting a strategic patience for more pronounced market dislocations.
Her comments come amidst a challenging environment for credit, with the $1.8 trillion private credit market experiencing an exodus of investors due to concerns over loan quality and exposure to software firms. Poli, in discussions on Bloomberg TV, has consistently emphasized a cautious approach to credit investing, looking for what she describes as "boring is beautiful" winners that offer tempting yields despite broader market anxieties. The firm is monitoring the impact of high rates, with the 10-year US Treasury yield recently reaching its highest level since 2007, hitting 5.02% on September 15, 2026, due to factors like surging energy prices and mounting debt. This rising rate environment is expected to intensify pressure on borrowers with upcoming debt maturities, creating the conditions for the distressed opportunities Oaktree is anticipating.
