The LME Era: Scale, Co-ops & Lender-On-Lender Risk with Aegon Asset Management

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Season 2, Episode 2

On this episode of LFI Levered Lines, Tom Davidson (Host) is joined by Jim Schaeffer (Global Head of Leveraged Finance, Aegon AM) for a deep dive into today’s bifurcated leveraged credit markets and the evolving playbook for liability management exercises (LMEs).

The conversation traces Jim’s journey from distressed debt to leading global leveraged finance, highlighting how a downside-first, all-weather approach shapes portfolio construction. Jim explains why spreads remain firm amid strong technicals and modestly better-than-expected earnings, even as 6–10% of the market faces mounting stress from higher-for-longer rates, inflation pressures, and repeat LME activity.

They unpack the mechanics of LMEs—from “good business, bad balance sheet” scenarios to the decisive role of speed and scale, cooperation agreements, and documentation flexibility. Jim contrasts collaborative deals with coercive, document-driven restructurings that re-tier lenders and can trigger litigation, and he shares practical telltales to spot each path early.