James Morrow

@kieranwgoodwin “ It can’t be valued” is just a ludicrous statement - half the loans in the avg book in April 23 have already paid off.

@mjmorrow99 $CCLFX made the statement that they had 8 quarters of liquidity.

$CCLFX "ALL GAS NO BRAKES" They just posted "10 things to know about CCLFX" I have suspicions about many of them but LIQUIDITY PROFILE really stuck out 🧵⬇️

@kieranwgoodwin That wasn’t the question though. You’re little scaring people here every day about “liquidity” while simultaneously trying to buy their fund holdings from them at a huge discount. May want to add that disclaimer.

@kieranwgoodwin Can you point to any example of any scaled Interval Fund that received 8-straight quarters of max redemption requests? Or was that just what you needed to get your math to math?

If $CCLFX paid out 8 quarters in a row of 5% of NAV, NAV would go from $33.1 bn to ~ $22bn. So they need $11bn of liquidity. I parsed their loans' FV maturing from 4/1/26 to 4/1/28 and that tolal is $3.7bn per 9/30/25 filing. Borrowings were $9bn. At $22bn NAV, they could borrow another $2bn to max debt at $11bn which is .5 of NAV per Interval Fund regs. None of the CLOs mature before 4/28. The BDCs like Barings are perpetual. The info on the PIVs in the notes is opaque but many have undrawn commitments still due so not maturing soon. Plus I am sure managers have extension rights. $CCLFX has a total ~ $8.35bn of DDTLA of which $4bn have been drawn and $4.35bn are undrawn commitments. YES borrowers draw down on DDTLAs!! They also have $2.3bn of Revolvers of which $425mm have been drawn so $1.875bn of undrawn commitments. Lastly they have commitments of $4.682bn of to the managers of the PIV. $11bn - $3.7bn - $2bn = HOLE OF $5.3bn PLUS $10.9bn of unfunded commitments .. Haircut that number but I suspect the % of those commitments that get called will be higher than anticipated. Sure they have some cash and some BSLs left. Maybe they get some inflows. But maybe they get some defaults and other NAV writedowns (CLO EQUITY??). Rolling and expanding their debt total will not be a walk in the park. I feel like $CCFLX should walk through their calculations if they make such a statement. But then again, $CCFLX did post a positive Feb return while everyone else was negative so perhaps, they just are superior investors.

@ADHD_Capital Doesn't fit the fear mongering narrative

They had net inflows for the quarter and you don’t want to mention that?

@debt_serious @elerianm Bingo !

@elerianm fear-mongering by RTing these clickbait articles was not on my bingo card. If anything, $ARES, $APO, and $BLK saying "enough with this nonsense," and sticking to the 5% investors are entitled to should give smaller Alts room to resist these demands.

@debt_serious Thanks!

@mjmorrow99 John Authers’ Bloomberg newsletter: bloomberg.com/opinion/newsle…

When I say the media is obsessed with private credit, I really mean it.

@debt_serious Curious where you saw this chart originally?

@debt_serious great chart

@kieranwgoodwin @LeylaKuni The Board will set an amount between 5% and 25% of the Fund’s Shares based on relevant factors, including the liquidity of the Fund’s positions and the Shareholders’ desire for liquidity. This is language straight from the Prospectus. They are not "forced" to do anything.

@mjmorrow99 @LeylaKuni Interval funds can’t gate without SEC exemption .. high bar to get exemption .. low bids doesn’t cut it

Let’s now annualize this math, add fees and leverage

@kieranwgoodwin @LeylaKuni Please explain how will they be “forced” to sell loans?

Jon’s calculus might make sense if all the funds had bullet proof term leverage and could never be forced to sell a loan but that isn’t the case. If redemption persist for $CCLFX then, IMO they will be forced to sell loans. If “good loans” trade at $90 or lower, will banks mark at those new prices for financing lines. Obviously $BX will fair better than most with respect to treatment from the banks. Will those new prices be reflected in NAVs which could cause more redemptions? Will some PC funds be more aggressive in hitting bids to get down in leverage? Will secondary prices for good loans affect the ability of less good loans to refinance and thus increase defaults? Maybe PC loans are never forced to trade into a real bid (not affiliated CLO) but if they are the potential reflexivity is nasty IF “good” loans trade at 11+%. NOBODY KNOWS .. but I don’t view the situation as static much like on the flip side, I never put much credence in maturity walls as a huge bearish factor.

@debt_serious Bots and lots of self promotion I would guess. Fear and crises, perceived, imagined or actual ones, they all drive clicks.

@mjmorrow99 I am not. I am asking questions based on the data that jumps at me. Like, how are anons have 100k followers on X, but Callodine's founder only 60. It's a legitimate question to ask, imo

I get Wells – they had a cap on asset grow th and they likely went after more reg friendly loans (although that exposure is gigantic). But how is PNC has larger exposure than JPM and Citi?

@debt_serious Sure, It’s a reasonable question, but not one to be breathless about either.

@mjmorrow99 Right, let's make that Apollo's pitch of $40T of private credit thing. Look, the question is: how is PNCs' exposure higher than that of JPM and Citi. I think it is a reasonable question to ask, don't you think?

@debt_serious I've got a secret for you, nearly every loan on every bank balance sheet is "Private Credit"...

@mjmorrow99 Re-read the question I asked, Jimmy

@elerianm I have even more exciting news for you, nearly all of JPMs +$800bn of commercial loans on balance sheet are "private credit", these you've highlighted are 2.5% of that total. Lots of fear-baiting from one of the worlds largest traded fixed income shops....

Following JPMorgan’s announcement earlier this week (please see earlier post), here’s Bloomberg on “back leverage:” “Private credit funds, already on the defensive amid an unprecedented investor exodus and a number of defaulting borrowers, are now bracing for a battle with their go-to lenders: major banks.” #economy #markets #privatecredit #banks

@kieranwgoodwin There is an easy answer, to limit withdrawls at 5% per quarter, just like the docs say to protect investors from exactly the scenario you're trying to create. That's how a fiduciary should act.

Mutual funds, ETFs, and HFs can lose 25 to 50% of AUM in 6 to 12 months when performance or sentiment shifts. Painful? Yes. But redemptions are honored (HFs do gate). Markets clear. Managers adjust. Price discovery happens. In contrast, when redemptions rise in non traded BDCs, gates go up as per design. Did PC managers really believe that the popularity of the NT BDC would NEVER wane? As HLEND’s manager put it in the article below: “You never want to be in a position to have to sell illiquid assets based on short term demands for capital. Capping withdrawals allows us to try to optimize performance because we only have to respond to predictable liquidity requests.” That is precisely the issue. What happens if 30% of investors want their money back next quarter? When do you stop making new loans? When do you decide that you should sell illiquid PC? What happens if banks reduce financing lines? No easy answers which why I believe the product was flawed from Day 1. Public markets impose discipline. Non traded vehicles can suspend it.

@kieranwgoodwin It's great you can vouch for a "large %" of end buyers, and their financial advisors, and what they do and don't realize. Just curious, how can you do that?

PC ➡️ Private Wealth Channel Gating was fully disclosed but my opinion is that these funds were aggressively marketed to HNW and that a large % of end buyers didn’t understand the reality of gating and its knock on effects.

@kieranwgoodwin You guys are literally yelling “fire” every day on X, in what you think is a crowded theater set up (it’s not) - then self congratulate yourselves on being “prescient/right”, while failing to disclose its all to drive your own business for financial gain….own that

So all the non traded BDCs own some Lev Loans aka BSLs for their “liquidity sleeve” .. They will sell these loans as redemptions soar then HY looks too tight which gets sold then IG. CREDIT IS CORRELATED

@junkbondinvest What have been the forward 24-month historical returns if you bought BDCs every time they traded at 0.85x Book or below? That seems the relevant question.

Everyone has a BDC take this week. Most of them are wrong. If you don't understand how they trade, what drives the discount, or why NAV isn't what you think it is, start here. junkbondinvestor.com/p/the-bdc-prim…

@LeylaKuni Your comment seems purposely deceptive. The graph is of BDC assets only which are a fraction of these firms total assets

Blackstone, 29% of AUM is IT (most of it, software) Blue Owl - 20% tech FT is killing it with interactive charts - link below