The Credit Edge by Bloomberg Intelligence Capital Group Spies High-Yield Software Opportunity in Debt Meltdown
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Mar 5, 2026 Shannon Ward, a Capital Group fixed income portfolio manager with decades of experience, talks high-yield and leveraged-credit strategies. She explores a software sell-off creating bargain opportunities. She explains why loans may take the hit, how to pick resilient software names, and where selective dip-buying and sector positioning could pay off.
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Be Cautious With Liability Management Exchanges
- Avoid excessive participation in liability management exchanges (LMEs); most end poorly and many lead to bankruptcy within a few years.
- Ward says lenders should protect investments and recognizes LME risk rises with covenant‑light structures.
Protections Improved By Experience Not New Tech
- Lender protections have improved mainly through experience spotting weak indentures, not through a wholesale resurgence of tougher underwriting.
- Ward describes it as a power game where the party with leverage dictates covenant terms and lenders must decide whether to walk away.
Big Media M&A Will Reshape High Yield Supply
- Large media deals like Paramount‑Skydance/Warner combinations will meaningfully increase high yield supply and create layered relative value opportunities.
- Ward says the market can absorb the debt but pricing and capital structure decisions will drive opportunities post‑financing.