Three Factors of Increased Default Rates

This thread covers a passage from Moyer's "Distressed Debt Analysis" on similar events that have coincided with periods of high default rates. Referring to the default spike of 1999-2002, Moyer writes:

While it is always difficult to prove causation, some of the events which coincided with the 1989-1991 default spike included: (a) a large number of increasingly speculative leverage buyout transactions in the 1986-1989 period financed by then-record levels of high-yield bond issuance; (b) the implementation by the Federal Reserve of a tight monetary policy designed to quell inflation, which caused interest rates to rise to high nominal levels and resulted in an economic recession in the United States in 1990 and 1991; and (c) the implementation of certain reforms on the then-troubled savings and loan industry, including passage of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which effectively required savings and loans to divest their high-yield bond portfolios in an unfavorable market environment.

Current Market Situation

• The U.S. leverage loan market is increasing to record levels per this article, while the amount of debt in LBO transactions is also increasing to levels that "raises concerns" according to this article by S&P Global.

• It appears if if the Fed has implemented a rather lenient monetary policy with the fed funds rate set to remain in the 2-3% range for the short-term. At the time of writing this article, the fed funds rate is 2.36%. With trade wars looming, production has slowed, and thus, the Fed has discussed lowering the fed funds rate.

Discuss

• Does anyone know what the yield on debt issuance in LBO transactions currently looks like?

• How do current regulations compare to times of previously high default rates? Has the Act of 1989 discussed by Moyer changed after the '07-'08 Financial Crisis?

May add more later—just wanted to share in the meantime. Additionally, if anyone has extensive knowledge of Caesar's 2015 bankruptcy and would be open to discussing it briefly, please PM me.