Credit Funds Are Ripping Up Rule Book as Defense Spending Soars (1)

Europe’s plan to rearm in the face of Russian aggression and US detachment has already delivered a bonanza to equity investors. Credit funds are scrambling to get a share of the windfall, too.

Like other key parts of the capital markets, corporate-debt investors are having to navigate ESG restrictions that in more peaceful times put weapons makers beyond the pale. Now they’re looking to rip up many of those rules.

European bond and loan buyers are either pitching to loosen their own limits on financing defense companies, or expanding the meaning of ESG to take in manufacturers of fighter jets, ...