The Credit Edge by Bloomberg Intelligence

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- Bloomberg

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Afsnit: 189
Gns. varighed: 49M
Sprog: Engelsk
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Kategori: Økonomi & Business

The Credit Edge reviews the top credit news of the week and looks at the week ahead, with in-depth research of the most important corporate sectors, trends and themes. Analysis of specific corporate bonds and credit default swaps is backed by Bloomberg Intelligence's robust data sets and indexes.

Episodes

Columbia Threadneedle Scans AI Debt Rush for Alpha OpportunityColumbia Threadneedle is looking to outperform by buying into the flood of debt from companies building artificial intelligence infrastructure. “It’s really the best place to try to find some volatility and some alpha opportunities here, as long as you can remain nimble,” Tom Murphy, the $715 billion manager’s head of investment-grade credit, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in the latest Credit Edge podcast. “If we start to see all of this investment turn into cash flow, it could really be tremendous,” he says. They also discuss fundamental and technical credit market indicators, the September issuance rush and relative value in financial sector bonds. See omnystudio.com/listener for privacy information.
190|51M
‘Things Are Going to Get Crazier’: AI Debt Deluge Recalls 2007 RisksMassive borrowing by artificial intelligence companies — some of it to fund their own customers — risks inflating a technology-sector bubble, according to Seaport Research Partners. “Things are going to get crazier,” Jay Goldberg, the firm’s senior analyst for semiconductors and electronics, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Robert Schiffman in the latest Credit Edge podcast. “All this debt is coming on stream, it’s going to amp up things even further — this feels to me like 2007,” Goldberg says. “There are certainly corners of the industry that are prone to blow ups.” They also discuss AI vigilantes, concentration risk and growing anxiety about circular financing. See omnystudio.com/listener for privacy information.
189|54M
BMO Slashes Junk Debt Holdings as Geopolitical, Economic Risks SpreadBMO Asset Management, which oversees almost C$300 billion ($218 billion), has cut its junk-bond holdings and moved into safer parts of credit as geopolitical and macroeconomic pressures mount. “We love the movie — we’re still there — but we’re just getting a seat closer to the exit,” Earl Davis, the firm’s head of fixed income and money markets, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Spencer Cutter in the latest Credit Edge podcast. “You’re not getting paid to hold as much risk here,” he says. They also discuss why the financial and energy sectors look attractive, how to play hyperscaler bond issuance and opportunities in Canada’s nascent high-yield market, including debt from commodity and defense companies. See omnystudio.com/listener for privacy information.
188|54M
LBO Debt Coming Due Is Next Big Test for Credit Markets, Says ICGCompanies need to move fast to refinance leveraged-buyout debt coming due over the next few years, according to ICG. “Folks should start getting ahead of it because the traffic jam may be more the issue than anything,” David Saitowitz, the $126 billion global alternative asset manager’s head of US liquid credit, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Mike Holland in the latest Credit Edge podcast. “That could be the kind of risk event that may push the market wider for a period of time,” he says, referring to credit spreads. They also discuss the AI funding bubble, collateralized loan obligation performance and fallen-angel risk. See omnystudio.com/listener for privacy information.
187|46M
Investors Keeping Score on 'Bad PIK', Benefit Street Partners' Kumar SaysInvestors are increasingly wary of lenders who dish out so-called bad PIK, or payment-in-kind interest, to help struggling portfolio companies avoid default, according to Anant Kumar, global investment strategist at Benefit Street Partners, the private credit arm of $1.7 trillion asset manager Franklin Templeton. “If you’re a manager who wants to mask stress in the portfolio by doing that, you can probably fool some of the people some of the time,” he tells Bloomberg News’ Sinead Cruise and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “I do think investors will catch on if you see a widespread use of PIK in the portfolio without any resolution.” Those managers will likely undershoot expectations when their next fundraising rolls around, Kumar says. The trio also discuss the resilience of private credit illiquidity premia, the specter of inflation and how an industry transparency push is forcing firms to address dubious marks faster than ever before. See omnystudio.com/listener for privacy information.
186|55M
Wellington Passes on Data Center Debt, Questioning Long-Term ValueData-center debt returns are falling, risk is rising and there’s uncertainty over what the properties may be worth in the long run, Wellington Management says. “We think a lot about that replacement value when evaluating data centers,” Sonali Wilson, the $1.3 trillion manager’s lead investment director for private credit, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in the latest Credit Edge podcast. “Today, I’ll say — not every situation — but, by and large, it’s a pass,” she says. They also discuss commercial real estate investment strategies, how to position for AI disruption and why Wellington is building out a private-debt platform now. See omnystudio.com/listener for privacy information.
185|49M
Bull Run in Loans Slams CLO Equity Buyers, Says Eagle Point’s MajewskiCollateralized loan obligations face a second straight year of equity losses, according to Eagle Point Credit Management, a major buyer. “Where we stand right now, it’s certainly possible,” Tom Majewski, the $14 billion private-credit manager’s founder and managing partner, says in this episode of the Credit Edge podcast, when asked about the chance of negative returns. “While there were some credit problems, oddly the bigger issue was the bull market and repricing of loans,” Majewski tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Reto Bachmann. They also discuss software-loan stress, business-development-company turmoil, lower returns in significant risk transfers and how Eagle Point is diversifying into hard assets like midmarket infrastructure lending. See omnystudio.com/listener for privacy information.
184|48M
Sona’s CEO Sees ‘Exciting’ Growth in Asset-Based Finance, SRTsSona Asset Management is looking to expand its business in asset-based finance and significant risk transfers as public and private debt markets converge. “The thing that excites us the most is the scope for growth in ABF markets here in Europe,” Henrik Johnsson, the London-based hedge fund’s chief executive officer, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Aidan Cheslin in the latest Credit Edge podcast. “We really like SRTs, although spreads have obviously come in a lot over the last couple of years,” Johnsson adds. They also discuss how to short corporate debt, software-loan distress, secondary sales of private credit assets and investing in the AI boom. See omnystudio.com/listener for privacy information.
183|46M
SpaceX Bondholders Face Huge Key Person Risk on Their Elon Musk TripSpaceX bondholders are bolstered by a fat equity cushion, high-grade ratings and a relatively small amount of debt outstanding — but they depend on founder Elon Musk, according to Bloomberg Intelligence. “There’s a huge risk there, and the rating agencies have actually pointed this out in terms of governance,” Robert Schiffman, BI senior technology credit analyst, tells Bloomberg News’ James Crombie in this special episode of the Credit Edge podcast. “You’re absolutely on an Elon Musk trip — his vision and his ability to raise money is a large portion of this company right now,” adds George Ferguson, BI senior equity analyst for aerospace, defense and airlines. The trio also discuss poor secondary performance in SpaceX bonds, relative value compared with the equity, and credit-market risks if AI flops. See omnystudio.com/listener for privacy information.
182|36M
Europe's Largest Asset Manager Warns of AI Debt Deluge Crowding OutFurther acceleration in AI debt issuance has the potential to steer demand away from government bonds, according to Amundi, Europe’s largest asset manager. “At some point it could have a crowding effect, but we are not there yet,” Gregoire Pesques, the firm’s chief investment officer for global fixed income, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “It’s a risk that we monitor,” says Pesques, whose company has $2.7 trillion under management. They also discuss value in corporate debt relative to government bonds, how G7 countries are behaving more like emerging markets and Amundi’s concerns about central bank independence. See omnystudio.com/listener for privacy information.
181|51M

The Credit Edge by Bloomberg Intelligence

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