The Credit Edge by Bloomberg Intelligence

Traded corporate debt is much more attractive than private credit, according to RBC BlueBay Asset Management. “Public credit is far superior,” Tom Moulds, senior portfolio manager for investment-grade fixed income at the $534 billion firm, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “There’ll probably be a point where you do see...

Leveraged buyouts are poised for a revival, albeit less aggressively structured than in the last wave, according to Moody’s Ratings. “Ultimately everyone will need to adjust to the new environment and you will see deal flow come back,” Christina Padgett, the firm’s head of leveraged finance and private credit research, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jean-Yves Cou...

Collateralized loan obligation equity stands to gain as much as 15% this year, according to Tetragon Credit Partners. “It’s teens returns, high current cash flows and diversification,” said Dagmara Michalczuk, co-chief investment officer at the firm, which specializes in the riskiest part of the CLO market. “We are in vanilla corporate America, just using a little bit of leverage in financial engineering to ...

More companies will fail to repay debt as funding costs stay high, according to Mudrick Capital Management. “What we’re getting is just elevated defaults every year, we think for the next five to seven years,” Jason Mudrick, the distressed debt fund’s founder and chief investment officer, tells Bloomberg News’ Irene Garcia Perez and Bloomberg Intelligence’s Mike Holland in the latest Credit Edge ...

Fox Legal Training sees debt documentation risks rising as too much cash chases a limited number of high-yield deals. “Provisions these days are drafted in a way that they are very much departures from reality,” Sabrina Fox, the company’s founder, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Aidan Cheslin in this episode of the Credit Edge podcast. “That creates an alternate u...

US billionaires and sovereign wealth funds are going to get more active in global sports investing, according to Andalusian Credit Partners. “The US invasion into other markets is just getting started,” Aaron Kless, the US middle-market direct lending platform’s chief executive officer, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Arnold Kakuda in this episode of the Credit Edge pod...

Ares Management, the $550 billion alternative investor, expects private lenders to get more involved in funding Europe’s rearmament. “We are starting to see more defense opportunities come across the desk,” Mike Dennis, the company’s co-head of European credit, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jeroen Julius in this episode of the Credit Edge podcast. “We woul...

JPMorgan Asset Management is seeking hedges against credit market losses as risks rise and spreads tighten. “There’s value in shorts and credit protection,” Oksana Aronov, the firm’s head of market strategy for alternative fixed income, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jody Lurie in the latest Credit Edge podcast. “It is very undervalued today because of the ...

HPS Investment Partners is building out its fund finance business, including net-asset-value lending. “It’s a huge opportunity,” Purnima Puri, head of liquid credit and a founding partner at the $150 billion firm, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “Exits for private equity sponsors have been somewhat limited and it&rsq...

Barings Sees Global Credit Investor Pivot to Europe (Podcast)Demand for European corporate debt is rising as global investors seek to diversify out of US markets, according to Barings, the $442 billion asset manager. “US exceptionalism is a little bit more questioned, investors are increasingly concerned about US economic policy,” Mike Best, a high-yield and senior loan portfolio manager at the firm, tells Bloomberg New...

When the credit cycle turns, “the game will be over” for some private debt funds that are overly exposed to weak companies, according to Silver Point Capital. “We see every deal that’s getting done — there’s some good deals and there’s some bad deals,” Michael Gatto, the firm’s head of private side businesses, tells Bloomberg News’ Irene Garcia Perez and Bloomberg Intellig...

Collateralized loan obligations are a credit safe haven as highly-indebted companies get dragged down by economic slowdown, according to PGIM Fixed Income. “These structures are bulletproof,” Greg Peters, the $860 billion asset manager’s co-chief investment officer, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Matthew Geudtner in the latest Credit Edge podcast. “The loan marke...

Credit markets are rallying but there’s elevated risk of some companies not repaying debt, according to the Schwab Center for Financial Research. “There’s a sense of complacency,” Collin Martin, the firm’s fixed income strategist, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Himanshu Bakshi in the latest episode of the Credit Edge podcast. “Defaults are probably go...

Private credit may be hot, but it isn’t for all investors and doesn’t do better than traded junk debt, according to Dimensional Fund Advisors, which manages $790 billion in assets. “There is no outperformance relative to high-yield public bonds,” Savina Rizova, the firm’s co-chief investment officer and global head of research, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’...

Tariffs are inflicting economic damage that will force more companies to default on their debt, according to Polus Capital Management. “We do have a more substantial book of single name, high-yield credit shorts,” Robert Dafforn, the firm’s chief investment officer for opportunistic credit, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tim Riminton in the latest episode of the Credit...

Yield-hungry credit investors are increasingly seeking longer-dated corporate debt, just as supply is evaporating, according to Barclays. “It’s problematic,” Meghan Graper, the firm’s global head of debt capital markets, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Arnold Kakuda in the latest Credit Edge podcast. “I worry — can we source enough assets to appeal to ...

Property markets are headed for trouble as the US economy slows and interest rates stay high, according to Hines, the global real estate investment manager.“We will probably see a bigger wave of assets in distress,” Alfonso Munk, who runs the firm’s debt business, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “What ...

More corporate debt will plunge into distress when the US economy tanks, Marty Fridson, chief executive officer of Fridson Vision High Yield Strategy. “I have high confidence that we will get back to 1,000 basis points on the high-yield index as a whole at the worst point of the next recession,” the veteran credit strategist tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Spencer Cutter in t...

Risky corporate debt markets have room to fall further to reflect the damage of ongoing trade wars, according to BlackRock, the $11.6 trillion money manager. “We’re likely to see spreads widen from here as we see further deterioration in risk assets,” Mitch Garfin, the firm’s co-head of leveraged finance, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Robert Schiffman in the lat...