Chit Chat Stocks Howard Marks: The Distressed Debt King (What Does He Think About AI and Private Credit?)
Apr 29, 2026
A deep dive into distressed-debt investing, from bond math and yield mechanics to real-world crisis plays. Stories include loan-to-equity conversions, airline lending during COVID, and ships-for-equity turnarounds. They debate AI’s limits in investment judgment and warn about private credit’s crowded market.
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Buy Distressed Debt During Fire Sales
- Howard Marks built Oaktree around buying distressed debt at deep discounts during panics.
- He targets fire-sale pricing where loans trade far below intrinsic value, producing high yield-to-maturity when prices recover.
How Marks Played The Great Financial Crisis
- Marks predicted lending loosening before the Great Financial Crisis and sat on dry powder to deploy as panic hit.
- He raised over $10 billion in 2008 and bought assets cheaply as forced sellers sold to meet redemptions and margin calls.
Inter Milan Loan To Ownership Story
- Oaktree lent 275 million euros to Suning with a PIK loan and later seized Inter Milan when payments rolled up.
- The loan grew to ~400 million euros and converted into a club now valued around $1.1–1.3 billion, illustrating loan-to-equity outcomes.
