All The Credit, Episode 6
In episode six, Host and Senior Portfolio Manager Mike Collins welcomes PGIM Fixed Income's distressed credit analysts, Gregory Cass and Carras Holmstead
PGIM Fixed Income’s Credit Research Team conducted a corporate solvency and liquidity analysis across the global credit industries affected by COVID-19 shutdowns that segmented the industries into one of three buckets: (1) minimal impact, (2) material impact, and (3) significant impact.
The levels of impact are dynamic, and industries can shift across categories depending on developments, e.g. government support for a particular industry. The synopsis below assumed negative global GDP in Q2 and Q3 2020, and 12 weeks of work-from-home/shelter-in-place with most businesses closed except for essential goods and services.
In tackling a solvency and liquidity analysis across various global industries affected by COVID-19 shutdowns, PGIM Fixed Income’s credit research team of more than 100 analysts conducted a scenario analysis that segmented the respective industries into one of three buckets: minimal impact, material impact, or severe impact. The paper concludes with a sample, summary analysis of industries at the wings of the impact—U.S. energy and retail from the severely-impacted bucket as well as U.S. money center banks and U.S. and European telecom from the minimally impacted segment.
This information has been prepared by PGIM Fixed Income's credit research group and is not meant to be investment advice nor to be relied upon for purposes of buy, sell, or hold decisions. Neither the information herein nor any opinion herein are to be construed as an offer to sell or the solicitation of an offer to buy any security. PGIM Fixed Income is not soliciting any action based upon this material. The comments, opinions, and estimates contained herein are based on and/or derived from publicly available information from sources that PGIM Fixed Income believes to be reliable. We do not guarantee the accuracy of such sources or information. This outlook, which is for informational purposes only, sets forth our views as of August 2020. The underlying assumptions and our views are subject to change. The outlooks contained herein are not a guarantee of future performance of any asset class. Source: PGIM Fixed Income as of August 2020.