The Credit Edge by Bloomberg Intelligence

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....

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...

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...

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 ver...

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 ha...

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 manag...

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...

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...

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 podca...

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 Crombi...

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...

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...

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 lates...

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 Intel...

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&...

Tariff chaos has tossed retailers into a crisis similar to Covid in 2020, leaving them unable to plan ahead, according to AlixPartners, the financial advisory and global consulting firm. “It’s a little crazy and retailers are canceling orders,” Holly Etlin, a partner at the firm and restructuring veteran, tells Bloomberg News’ Reshmi Basu and Bloomberg Intelligence’s...

Global market turmoil opens a window for credit investors in companies with too much debt, according to London-based Aptior Capital, which specializes in distressed debt and rescue finance. “All this volatility, it throws up even more opportunities,” founder Rudi Singh tells Bloomberg News’ Giulia Morpurgo and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge...

Retail investors aren’t yet ready to jump on the private credit bandwagon, according to Janus Henderson. “The skepticism there should be real,” John Kerschner, the firm’s head of US securitized products, talking about exchange-traded funds focused on direct lending. “The underlying isn’t nearly as liquid and hasn’t really been tested throughout a real disl...

Fundamental and technical pressures on credit markets are growing as trade wars escalate, according to JPMorgan Asset Management. “We just need to be paid a little bit more for the uncertainty risk now in the market,” says Lisa Coleman, the firm’s head of global investment-grade corporate credit. “The technicals from where we were at the beginning of the year have deteriora...

Global portfolio managers are seeking debt investment alternatives in China and Europe amid mounting volatility in America, according to CreditSights. “The US seems to be sneezing an awful lot lately and the rest of the world is saying, ‘Well how do we mask up and try to defend ourselves against this?” said Winnie Cisar, the firm’s global head of strategy. “If US exce...

Amid heightened volatility in American capital markets, there are more attractive private debt options elsewhere, according to alternative investment manager BC Partners. “In 25 years of doing this, it’s probably the first time we’re seeing actually decent relative value in Europe,” said Ted Goldthorpe, the firm’s head of credit. “The US has always provided bett...

Private credit is getting squeezed by excess demand for limited deals, but AllianceBernstein says it will continue to pay more than publicly traded debt. “Even as base rates have come in, that premium remains fairly persistent,” said Matthew Bass, the firm’s head of private alternatives. “If the premium gets too small, then as an investor, you’re going to start to que...

The best credit opportunity lies in middle-market collateralized loan obligation equity, according to Carlyle. “It is a newer market and not everyone’s investing and chasing that asset class,” said Lauren Basmadjian, the firm’s global head of liquid credit. “We’re seeing mid-to-high teens IRRs,” Basmadjian tells Bloomberg News’ James Crombie and Bloo...

As trade wars intensify, inflation persists and geopolitical risks spread, Pimco is finding value in the debt of large US banks and leisure-sector companies. “There are some really strong spots within lodging, cruise lines and the like,” said Sonali Pier, who focuses on multi-sector credit opportunities and is a senior member of the $2 trillion asset manager’s leveraged finance t...

Goldman Sachs is advising credit investors to protect against losses amid expensive valuations and rising geopolitical turmoil. “The cost of hedging is the lowest it’s been in probably a very long time — use that to your advantage,” said Lotfi Karoui, the firm’s chief credit strategist. “Look at that left tail of the distribution — the known unknowns, the...