Greenlight’s Next Short: Corporate Credit

David Einhorn’s hedge fund is now shorting corporate investment grade and high-yield debt.

David Einhorn (Alex Flynn/Bloomberg)

David Einhorn

(Alex Flynn/Bloomberg)

David Einhorn’s Greenlight Capital has established a negative bet on U.S. corporate credit.

The value-oriented, mostly long-short equity manager said it is shorting both investment grade and high-yield debt, according to the firm’s second-quarter letter, obtained by Institutional Investor.

“Over the last few years, corporate debt has expanded dramatically, while covenant packages and other bond-holder protections have weakened considerably,” the firm explained in the letter.

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