Pressure on Blue Owl Capital isn’t easing after an asset sale last week raised concerns from government officials about the $1.8 trillion private credit industry. Treasury Secretary Scott Bessent expressed worry over the company’s growth and potential risks to individual investors. Blue Owl sold $1.4 billion in loans and lending commitments, with some proceeds used to repay investors. Blue Owl’s stock fell 5% following the sale. Analysts, including Oppenheimer’s Chris Kotowski, believe there is no serious concern about a deterioration in private credit quality. Blue Owl co-CEO Marc Lipschultz reassured analysts that there are no red flags in the credit quality of its loans. Some eyebrows were raised over Blue Owl’s sale to insurance-focused asset manager Kuvare, sparking concerns about interconnectedness between private credit and insurance industries. Barclays analyst Ben Troisi viewed the sale as more positive than negative, but raised concerns about the implications of a private lender selling assets to an insurance subsidiary. Treasury Secretary Scott Bessent emphasized the need to assess the potential effects of private credit on the overall economy and prevent contagion. 1. The stock market experienced a sharp decline today, with the S&P 500 dropping by 3% and the Dow Jones Industrial Average falling by 600 points. This was attributed to concerns over rising inflation and interest rates, causing investor jitters.
2. The latest unemployment report showed a decrease in jobless claims, with 350,000 people filing for benefits last week. This marks a slight improvement from the previous week, indicating a positive trend in the labor market despite ongoing challenges.
3. A new study revealed that 70% of Americans are now fully vaccinated against COVID-19, a significant milestone in the fight against the pandemic. This comes as the Delta variant continues to spread, prompting renewed calls for booster shots and continued vigilance in public health measures.
Read more at Yahoo Finance.: Scott Bessent says Treasury is keeping a close eye on the private credit market