The Credit Edge by Bloomberg Intelligence

Corporate debt is well placed to withstand global turmoil caused by new US trade policy, according to Crescent Capital Group. “There is going to be a lot of volatility, but I think the markets are now becoming more accustomed to not reacting to those headlines,” said Chris Wright, the firm’s president and head of private debt. “Credit markets are pretty stable,” he te...

As rates stay high, bank lenders retreat and volatility rises, Gramercy Funds Management sees significant growth in private credit to developing nations. “We’re just scratching the surface in emerging markets,” said Robert Koenigsberger, the firm’s founder, chief investment officer and managing partner, referring to private debt. “It’s really exciting to go deep...

UK-based Pemberton Asset Management has widened its scope to stay ahead in the increasingly competitive world of private credit. “You’ve got to have a range of products that people think are relevant and attractive,” said Symon Drake-Brockman, the firm’s co-founder and managing partner, referring to net asset value financing, collateralized loan obligations and risk sharing...

Centerbridge Scans Consumer Pain as Inflation Lingers (Podcast)Stubbornly high prices are a threat to consumers that could bleed through to credit markets, according to Centerbridge. “The rising cost of goods and interest rates will have an impact,” said Aaron Fink, the firm’s head of asset finance. “To the extent we see deterioration in jobs, and in the labor market more b...

Debt spreads are set to tighten further as demand for yield rises and net supply remains constrained, according to First Eagle Alternative Credit, which is cautious about the year ahead. “Stay conservative — that’s the mantra that we’re operating under,” said Jim Fellows, the firm’s co-president and chief investment officer, referring to leveraged loans, private...

A sustained period of elevated interest rates has the potential to cause pain in the fastest-growing part of corporate debt, according to RBC Global Asset Management. “We are concerned about how the direct lending private credit space would deal with a higher-for-longer world,” said Andrzej Skiba, the firm’s head of US fixed income. “You’re much better off in public m...

Private credit could become a $40 trillion market in five years, according to Apollo Global Management. “We’re going to get there really soon,” Akila Grewal, the firm’s global head of credit product, tells Bloomberg News’ James Crombie and Bloomberg Intelligence analyst Matt Geudtner in the latest Credit Edge podcast. Currently, “we estimate it’s a $20 tri...

Credit spreads are poised to hit record tight levels in the first quarter, even as debt issuance rises, according to participants in this special 2025 outlook edition of the Credit Edge podcast, hosted by Bloomberg’s James Crombie. We discuss bonds, loans, private credit — and bourbon — with the following guests: Kathy Jones, chief fixed income strategist at the Schwab Center for...

Swelling demand for limited supply of corporate bonds and loans could spell trouble for credit markets, according to PineBridge Investments. “The thing that gives me a lot of pause right now — and some concern — is the lack of net new supply versus the amount of demand out there,” said Jeremy Burton, the firm’s portfolio manager for US high yield and leveraged loans. “That leads to the risk that t...

Real estate and private equity are a better investment than direct lending, according to JPMorgan Asset Management. Those two have repriced on higher rates, while private credit hasn’t, Gabriela Santos, the firm’s chief market strategist for the Americas tells Bloomberg News’ James Crombie and Bloomberg Intelligence senior credit analyst Robert Schiffman, in the latest Credit Edge podcast. “It’s b...

Homeowners cashing out after a surge in real estate prices presents a major opportunity for debt investors, according to TPG Angelo Gordon. “We’re seeing the evolution of home equity products,” said TJ Durkin, the firm’s head of structured credit and specialty finance. “There could be $150 to $200 billion of origination per year, with a $2 trillion really addressable market there,” Durkin tells Bl...

Private credit to risky borrowers that need a lifeline is poised to boom as rates stay high, according to Oaktree Capital Management. “You’re going to see a lot of what they call rescue financing,” said David Rosenberg, head of liquid performing credit at Oaktree. “That’s going to be one of the greatest opportunities we’ve seen in a decade.” Loans to troubled companies will focus on sectors that h...

Sustainable finance can keep growing despite potential headwinds from the next US administration, according to Nikko Asset Management. “If the political side is not asking for disclosure on strategies and updates on ESG, we as portfolio managers have to ask,” said Holger Mertens, Nikko’s head of global credit, referring to environmental, social and governance standards. “It’s our job to make sure...

The US economy heading for a potentially “turbulent landing” may spell trouble for junk bonds, according to Colleen Cunniffe, head of global taxable credit research at Vanguard. “We’re actually relatively cautious on high yield at the moment from a broad perspective,” Cunniffe tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Himanshu Bakshi in the latest Credit Edge podcast. The wo...

Lending directly to middle-market US-based companies is the best opportunity in credit markets, offering double-digit yields, according to Randy Schwimmer, vice chairman at Churchill Asset Management. “We probably only have a small handful of lenders that we’re competing against,” Schwimmer tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Mike Holland in the latest Credit Edge podc...

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High-grade US corporate bond issuance will rise again in 2025, building on this year’s record-setting pace, according to Goldman Sachs. “There’s a lot of growth in the economy that needs to take place, as well as all of the refi,” Jonny Fine, Goldman’s global head of investment grade debt tells Bloomberg News’ James Crombie and and Bloomberg Intelligence’s Arnold Kakuda in the latest Credit Edge p...

Private debt doesn’t offer high enough returns to justify the growing risks, according to Pimco. “Fundamentals are deteriorating in more levered portions of the credit markets,” said Mohit Mittal, chief investment officer for core strategies at Pimco. “You’re seeing more complacency, so you have to be very thoughtful, you have to be very careful.” Investment-grade direct lending pays only half the...

Schroders Capital is seeing growing interest in private debt from investors looking to diversify as returns in public markets decline. It’s finding the best relative value in commercial real estate where over-exposed regional banks can no longer lend. “The most interesting opportunity, I think is looking where there’s emotional bias and fear,” says Michelle Russell-Dowe, co-head of private debt an...

Blackstone Inc. expects private credit to balloon to $30 trillion in size, fueled by the energy transition, housing and data center lending. “We’re really expanding the opportunity set from quite a narrow part of the market to really a mainstream part,” said Rob Horn, global head of infrastructure and asset-based credit at Blackstone. “Not only can we get hard-asset collateral — which differs from...

The $1.7 trillion private credit market faces several challenges after years of rapid growth, according Ana Arsov, global head of private credit at Moody’s Ratings. “It’s going to be very important to get more transparency from the banks about is there some kind of synthetic leverage, additional leverage, coming to this market,” Arsov tells Bloomberg News’ James Crombie and Bloomberg Intelligence...

Victory for Kamala Harris in the US election would boost the bonds of basic industries, capital goods companies and utilities, according to Matt Mish, head of credit strategy at UBS. “A lot of that we think is tied to the preservation of the inflation reduction act and support of many of the Biden-era stimulus policies,” Mish tells Bloomberg News’ James Crombie and Bloomberg Intelligence senior cr...

As commercial real estate continues to menace banks and investors, Goldman Sachs Asset Management is leaning into the debt. “What we’ve been able to do is find a lot of opportunities in commercial mortgage-backed securities,” Lindsay Rosner, head of multi-sector investing at the company, told Bloomberg News’ James Crombie and Bloomberg Intelligence credit analyst Jody Lurie in the latest Credit Ed...

Funding companies with unsustainable debt loads has been “the best opportunity in the corporate credit market over the last year or two,” Jimmy Levin, Sculptor Capital Management’s chief investment officer, says in Bloomberg Intelligence’s Credit Edge podcast. Separately, Sculptor expects substantial growth in asset-based finance, where Levin sees double-digit returns, he tells Bloomberg News’ Jam...

Norinchukin Bank faces significant losses from the sale of US and European sovereign bonds that tumbled as interest rates rose, and other financial institutions may also be exposed. “The bank is still losing more than a billion dollars a quarter,” says Bloomberg Intelligence senior credit analyst Pri de Silva, referring to the Japanese agricultural bank also known as Nochu. “They need to rip that...