Black on Distressed: Not Bad Enough Yet

I’m not in Munich for Super Return, but am hearing that the economic gloom has cast a pall over the proceedings. DealBook even suggested that a better name for this year’s event might be So-So Return (which is peppier than No Return). Even the ubiquitous protesters don’t seem as engaged…

Among today’s speakers so far was Apollo Management chief Leon Black, who disputed conventional wisdom that distressed investors should be turning today’s lemons into lemonade: “The banking system is more broken than it’s ever been but, we have not yet had the economic downturn that makes for great distressed investing,” adding that the timing may be better later this year. The problem, according to Black, is that while bank loan spreads are at record widths, high-yield spreads are still narrower than their 1999 or 2001 peaks…