# Credit Playbook

## Investment Grade (IG)
- Lower default risk, highly sensitive to interest rate changes (duration risk).
- Spreads tend to widen during liquidity squeezes or early recessionary phases.
- Used defensively in portfolios.

## High Yield (HY)
- High default risk, sensitive to economic growth and corporate earnings.
- Monitor issuance volumes, default rates, and refinancing conditions.
- Often trades with a high correlation to equities.

## Broadly Syndicated Loans (BSL)
- Floating rate, less sensitive to interest rate hikes.
- Vulnerable to rapid economic slowdowns and corporate earnings distress.
- Track collateralized loan obligation (CLO) creation for demand.

## Private Credit
- Illiquid, opaque pricing.
- Monitor covenant quality and direct lending market stress.
- Watch for distress in sponsor-backed middle-market companies.

## Commercial Real Estate (CRE)
- Highly cyclical, sensitive to both interest rates and economic activity.
- Focus on capitalization rates, occupancy levels, and refinancing walls.
- Regional bank exposure is a key systemic vulnerability.