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Comment by azlyrics | Hacker News Reader

checkout the citrix bond situation. unable to raise targeted goal through issuing corporate yields. its really scary we are seeing corporate bond yields spiking and liquidity drying up.

if a legitimate large corporation is having trouble raising money, its a huge red flag.

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Citrix in bond trouble? Time to start buying corporate bonds. Edit: Yup, Apollo and Elliott bought in huge.

Wow, debt looks super attractive.

Can you two (@azlyrics, @fny) expand on this - or point to a topical article?

When I first saw this @azlyrics comment was dead and I'm wondering what the fuzz is.

Citrix was struggling to borrow $4Bn for a leveraged buyout, they issued bonds that effectively yield 10% annually. That's a massive return we haven't seen forever in fixed income.

How do I buy it?

If you have to ask, probably the better approach is to buy a junk bond ETF like any of the ones on [0]. This will give you a more diversified portfolio than just betting on Citrix.

[0] https://www.thebalancemoney.com/list-of-junk-bond-etfs-12147...

Yeah and basically nobody wanted it, which implies that things are gonna get worse.

Or that Citrix was overextending itself.

Yeah, sure. That being said, the fact that there haven't been any other deals like this this year is a suggestion that the market for them has changed, mostly independently of the company involved.

its not just Citrix but corporate bond liquidity was highlighted in 2019 then the pandemic happened and everybody just glossed over it. now the pace of liquidity crunch across all corporate bonds is picking up as rates pick up.

The curious part is that even with insane returns, they still struggled to get attention from institutional investors who appear to be a mix of cash and short positions.

It’s definitely a buyout specific problem; deals that were inked before the Fed’s rate increases have pretty unattractive terms compared to the current market conditions. There’s a supply glut of buyout debt at those terms, underwriting banks are the ones holding the bag.

the thing is this corporate bond liquidity issue is not new. first alarms were raised in 2019, then they printed money like crazy in 2020, and now they are tightening and we are seeing bond liquidity meltingdown.

theres a very real chance that 10% yield will spike further and downgraded

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