The Credit Edge by Bloomberg Intelligence

Bloomberg

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.

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20 episodes
Updated July 23

Episodes20

Newest first

July 23 · 48 min
Wellington Passes on Data Center Debt, Questioning Long-Term Value
Data-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.
July 16 · 47 min
Bull Run in Loans Slams CLO Equity Buyers, Says Eagle Point’s Majewski
Collateralized 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.
July 9 · 45 min
Sona’s CEO Sees ‘Exciting’ Growth in Asset-Based Finance, SRTs
Sona 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.
July 1 · 35 min
SpaceX Bondholders Face Huge Key Person Risk on Their Elon Musk Trip
SpaceX 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.
June 25 · 49 min
Europe's Largest Asset Manager Warns of AI Debt Deluge Crowding Out
Further 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.
June 18 · 45 min
Real Estate Is Next Bet for Debt Investors Avoiding Private Credit
Private credit disarray spells opportunity for housing giant Pretium, which targets high returns by lending to US homebuilders. “Our private credit looks a little bit different than other private credit in the sense that we are secured, we have real good downside protection,” Jon Pruzan, the company’s co-president, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Erica Adelberg in this episode of the Credit Edge podcast. “We have a lot of people who want capital and not a lot of people providing capital — that puts us in an opportunity to continue to generate attractive returns,” says Pruzan, who was previously chief financial officer at Morgan Stanley. They also discuss housing fundamentals, opportunity by region, how Pretium achieves midteens returns and political risks going into the November US midterm elections. See omnystudio.com/listener for privacy information.
June 11 · 56 min
Oaktree Says Boring is Beautiful In Dicey Private Credit Market
Private lenders are going back to basics as debt trouble spreads, market participants tell Bloomberg News’ James Crombie in this special episode of the Credit Edge podcast. “Boring is beautiful, boring is better right now,” says Christina Lee, managing director at Oaktree Capital Management. The podcast also explores AI debt risks, software distress, how tight bond spreads can go and the state of US consumers with the following guests: Matt Brill, head of North America investment-grade credit at Invesco; Anish Shah, global head of debt capital markets at Morgan Stanley; Lotfi Karoui, multi-asset credit strategist at Pimco; Jody Lurie, Bloomberg Intelligence senior credit analyst; Na Wei, global head of leveraged finance at Barclays; Sheel Patel, head of Mayer Brown’s private credit practice in New York; Shalini Sriram, Third Point’s head of structured credit; and Scott Goodwin, co-founder of Diameter Capital Partners. Interviews were recorded June 3 at Bloomberg’s Global Credit Forum in New York. See omnystudio.com/listener for privacy information.
June 4 · 46 min
Goldman Sachs Sees ‘Uncomfortable Tension’ in Credit Markets
Robust demand from pensions and insurance companies will support corporate debt through macroeconomic headwinds and record supply, according to Goldman Sachs. “Spreads are tight to the prewar levels when the facts on the ground have unquestionably become more challenging,” Amanda Lynam, Goldman’s chief credit strategist, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Robert Schiffman in the latest Credit Edge podcast. “That is this uncomfortable tension that we have in the credit market,” Lynam says. “Sentiment around the yield-based buyer is really in the driver’s seat.” They also discuss the AI funding boom, private-credit risks, CCC underperformance and where to find value in structured products. See omnystudio.com/listener for privacy information.
May 28 · 54 min
Veteran ABS Investor Sees ‘Max Uncertainty With Max Complacency’
Bad software loans will cause credit-market trouble that recalls aspects of the global financial crisis, according to American Century Investments. “We call it max uncertainty with max complacency,” says Paul Norris, referring to tight credit spreads, in this episode of the Credit Edge podcast. “What’s interesting to me is the subprime crisis was very similar,” Norris, who leads the $330 billion asset manager’s securitized markets team, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Reto Bachmann. They also discuss growing risks to business development companies and collateralized loan obligations, advantages of public over private asset-backed debt and why residential mortgages are a buy. See omnystudio.com/listener for privacy information.
May 21 · 42 min
Principal Sees High-Grade Downgrade Risk as Issuance Ramps Up
Blue-chip companies, including hyperscalers, may be jeopardizing their credit ratings by piling on debt, according to Principal Asset Management. “We have seen some downgrades, and I would expect that that would continue as borrowing ramps up,” Mike Goosay, the $600 billion manager’s global head of fixed income, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Julie Hung on the latest Credit Edge podcast. “I don’t think that’ll have a behavioral effect on the way that investors look at the market, nor does it — to date, anyway — change the borrowing costs of those corporates,” he adds. They also discuss the artificial-intelligence funding frenzy, why junk bonds are attractive despite macroeconomic risks and how global government-bond volatility affects demand for credit. See omnystudio.com/listener for privacy information.
May 19 · 30 min
Private Credit Has a Weak Underwriting Discipline Problem
Loose underwriting standards are increasingly troubling for private credit market participants, according to Bloomberg Intelligence. “This concern has been growing for a period of time,” David Havens, BI’s senior analyst for private credit, tells Bloomberg News’ James Crombie in this special episode of the Credit Edge podcast. Weak underwriting discipline was flagged by private debt market participants in a recent global BI survey, rising in prominence compared with a poll conducted in September. In addition, direct lenders face lingering pressure from retail redemptions at business development companies. “Headlines are still going to be negative, focused on that very small portion of the market — it’s becoming slightly infectious and weighing on the wealth side of the business,” says Paul Gulberg, a senior analyst who covers global banks and asset managers. The trio also discuss the drivers of private credit growth, loan valuations, the liquidity premium and fund fees. See omnystudio.com/listener for privacy information.
May 14 · 50 min
JPMorgan Is Wary of Another Big Leap in AI-Related Spending
JPMorgan Asset Management sees value in the debt of companies building out AI, but it’s keeping a close eye on how much more they plan to spend next year. “If we’re seeing capex increase at the same rate that we saw 2025 to 2026, I think that’s probably a little bit of a red flag,” Stephanie Doyle, a portfolio manager at the $4.3 trillion firm, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Arnold Kakuda in this episode of the Credit Edge podcast. “I think the issuance is an opportunity,” said Doyle, who’s part of the money manager’s global fixed income, currency and commodities team. They also discuss the potential for credit spreads to tighten, rising net new bond issuance, the earnings outlook and growing macro risks. See omnystudio.com/listener for privacy information.
May 7 · 50 min
HarbourVest Expects Private Credit Secondaries Volume to Double
Secondary trading of private credit is on track to more than double last year’s record volume, according to HarbourVest Partners. “Through the first quarter we’re run-rating above $50 billion this year,” Greg Ciesielski, the $150 billion global private markets firm’s head of credit secondaries, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jean-Yves Coupin in this episode of the Credit Edge podcast. “It’s certainly a buyer’s market at the moment, which is what you generally see in dislocation,” he adds. They also discuss the impact of private credit stress on pricing, opportunities to buy assets from business development companies and how HarbourVest uses AI for valuation. See omnystudio.com/listener for privacy information.
April 30 · 49 min
Citi Warns of Private Debt Risk as ‘Tourists’ Are Forced to Sell
Rookie private lenders that have to sell in a downturn are a potential threat to credit markets, according to Citi. “If the cycle turns and these tourists, rather than working out loans, just start selling them at below the economic value — what happens to the rest of the market?” Mickey Bhatia, the firm’s head of spread products, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Sam Geier in this episode of the Credit Edge podcast. “That’s a big worry,” says Bhatia. They also discuss global fund flows, investment in AI infrastructure and expansion of electronic trading to incorporate collateralized loan obligations. See omnystudio.com/listener for privacy information.
April 23 · 46 min
Sycamore Tree Tips Chemicals in Iran Jam
Middle East shipping disruptions are boosting US companies bruised by cheap Chinese supply, according to Sycamore Tree Capital Partners. “It really slows down the ability for some of those Asian-based chemical companies to produce,” Trey Parker, the asset manager’s co-founder and chief investment officer, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Phil Brendel in the latest Credit Edge podcast. “You’re going to have more US- and European-based chemical companies have an inherent advantage,” Parker added. They also discuss health-care relative value, the outlook for debt defaults, a slowdown in liability management exercises and opportunity in credit secondaries. See omnystudio.com/listener for privacy information.
April 16 · 52 min
Davidson Kempner Sees a $770 Billion Stressed Debt Opportunity
US companies with $770 billion in loans are hitting a wall as interest rates stay elevated, according to Davidson Kempner. “We’re in year three of what’s already the longest default cycle in 20 years,” Suzy Gibbons, the hedge fund’s head of research, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in the latest Credit Edge podcast. “About a third of the market is stressed based on fundamental credit data,” she said. They also discuss liability management exercises, software defaults, distressed-debt returns and the broader impact of leveraged-debt stress on markets. See omnystudio.com/listener for privacy information.
April 9 · 51 min
BDC Bond Bust Creates Opportunity for $622 Billion Asset Manager MFS
A retail exodus from business-development companies has dragged their debt to levels that are starting to look attractive, according to MFS Investment Management. “Pressure for redemptions that they’re facing likely ends up creating some opportunities within the public credit markets,” Alex Mackey, the firm’s co-chief investment officer for fixed income, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Robert Schiffman in the latest Credit Edge podcast. “You can line up all the public and the private BDCs and you can go through and see which ones have the leverage metrics that are most attractive,” said Mackey, whose firm oversees $622 billion in assets. They also discuss the deluge of technology sector debt issuance and how wide credit spreads would have to go before they’d look attractive. See omnystudio.com/listener for privacy information.
April 2 · 47 min
PGIM Sees 'Chilling Effect' on Private Credit From BDC Storm
Business development company turmoil is making direct lenders cautious on corporate debt risk, according to PGIM, which oversees more than $200 billion in private credit. “It’ll have a bit of a chilling effect,” Matt Harvey, the firm’s global head of middle-market direct lending, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Matthew Geudtner in the latest Credit Edge podcast. “As a lender you’re a little bit more conservative, you’re a little bit more rational in terms of your view on how to structure the asset, how to price it,” Harvey says. They also discuss default rates, loan marks, the consumer staples sector and relative value in European direct lending. See omnystudio.com/listener for privacy information.
March 26 · 49 min
European PE Giant Permira Looks to Buy Beaten Up Software Loans
The plunge in software debt creates opportunities to buy cheap loans from companies that will survive AI disruption, according to Permira Credit. “The market has overreacted,” Ian Jackson, the firm’s head of strategic opportunities, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “The broad selloff in software has been such an interesting place for us because a lot of these names, we just don’t believe will go through restructuring,” says Jackson, whose company lends to technology companies. They also discuss fraud, private market stress, relative value in Europe vs. US credit and the outlook for collateralized loan obligations. See omnystudio.com/listener for privacy information.
March 19 · 47 min
BDC Veteran Expects Private Credit Fund Stress as Banks Pull Back
A bank retreat from private credit piles pressure on business development companies already reeling from a wave of redemptions, according to SLR Investment Corp. “You’re starting to see banks get nervous and start to pull back,” the BDC’s co-Chief Executive Officer Michael Gross tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Arnold Kakuda in this episode of the Credit Edge podcast. “It’s going to increase people’s cost of capital, which will make it harder for people to invest efficiently,” said Gross, who led Apollo Investment Corporation, part of the early wave of BDCs, before starting SLR in 2006. They also discuss software distress, how to avoid fraud and why BDCs still work for retail investors. See omnystudio.com/listener for privacy information.

The Credit Edge by Bloomberg Intelligence

Wellington Passes on Data Center Debt, Questioning Long-Term Value

Bull Run in Loans Slams CLO Equity Buyers, Says Eagle Point’s Majewski

Sona’s CEO Sees ‘Exciting’ Growth in Asset-Based Finance, SRTs

SpaceX Bondholders Face Huge Key Person Risk on Their Elon Musk Trip

Europe's Largest Asset Manager Warns of AI Debt Deluge Crowding Out

Real Estate Is Next Bet for Debt Investors Avoiding Private Credit

Oaktree Says Boring is Beautiful In Dicey Private Credit Market

Goldman Sachs Sees ‘Uncomfortable Tension’ in Credit Markets

Veteran ABS Investor Sees ‘Max Uncertainty With Max Complacency’

Principal Sees High-Grade Downgrade Risk as Issuance Ramps Up

Private Credit Has a Weak Underwriting Discipline Problem

JPMorgan Is Wary of Another Big Leap in AI-Related Spending

HarbourVest Expects Private Credit Secondaries Volume to Double

Citi Warns of Private Debt Risk as ‘Tourists’ Are Forced to Sell

Sycamore Tree Tips Chemicals in Iran Jam

Davidson Kempner Sees a $770 Billion Stressed Debt Opportunity

BDC Bond Bust Creates Opportunity for $622 Billion Asset Manager MFS

PGIM Sees 'Chilling Effect' on Private Credit From BDC Storm

European PE Giant Permira Looks to Buy Beaten Up Software Loans

BDC Veteran Expects Private Credit Fund Stress as Banks Pull Back