Ares Says Private Lenders Are Better Placed Than Public to Avoid Pain
Private credit is better placed than public to avoid blowups being seen in liquid debt, according to Ares Management Corp. “The level and amount of work you can do from a diligence standpoint is dramatically more extensive,” Joel Holsinger, partner and co-head of alternative credit at the company, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in the latest Credit Edge podcast. “There probably would have been more ability to do some of the work to unearth some of the stuff that has been alleged,” he adds, referring to recent bankruptcies of First Brands and Tricolor. They also discuss significant risk transfers, data-center lending, fund and asset-based finance, as well as philanthropy.See omnystudio.com/listener for privacy information.
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Aegon Is Worried About Junk-Debt Blowups
More highly indebted companies will slip into distress as the US economy slows and earnings suffer, according to Aegon Asset Management. “I am bracing for a little more trouble ahead,” Jim Schaeffer, the $380 billion manager’s global head of leveraged finance, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Julie Hung in the latest Credit Edge podcast. “We’re starting to see more and more companies just hitting a wall,” he adds. They also discuss the third-quarter earnings outlook, opportunities in structured finance, how to invest in the debt of beer and food companies, as well as private credit hazards.See omnystudio.com/listener for privacy information.
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CLOs Are Tough to Blow Up, Crescent Says
Collateralized loan obligations, particularly those backed by middle-market borrowers, are a growing opportunity for investors, according to Crescent Capital Group. “You have to work really hard to blow those structures up,” said John Fekete, the company’s head of tradeable credit, speaking of CLOs generally. Middle-market deals will make up a “larger and larger percentage of CLO issuance,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jody Lurie in the latest episode of the Credit Edge podcast. We also discuss leveraged loan relative value, the outlook for US consumers and casinos, tariff damage and the impact of liability management exercises.See omnystudio.com/listener for privacy information.
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BlackRock Says CLOs Are Among Best Relative Value Picks in Credit
There’s opportunity in collateralized loan obligations, according to BlackRock, the world’s largest money manager. “CLO tranches are probably one of the best relative value picks within the credit markets,” James Turner, the firm’s co-head of European fundamental fixed income investment, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tim Riminton in the latest Credit Edge podcast. “You are getting a very good spread and deal pickup there,” he adds. They also discuss opportunities in the auto, health care and defense sectors, how to play chemicals industry debt and the outlook for buyouts, defaults and recoveries in leveraged finance.See omnystudio.com/listener for privacy information.
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Blackstone Says Private Credit Pays a Lot Better Than Liquid Debt Markets
Razor-thin debt spreads underpin the global investor push into private markets, which can pay significantly more, according to Blackstone. “We see excess spread in private credit,” Michael Zawadzki, chief investment officer of Blackstone Credit & Insurance, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in the latest Credit Edge podcast. “That’s a really attractive thing for our clients around the world,” he adds, marking the premium at 150-200 bps over both traded high-yield and investment-grade debt. The three also discuss the rise of foreign insurers, pension funds and sovereign wealth in private credit, as well as the outlook for data-center finance, leveraged buyouts and default risks.See omnystudio.com/listener for privacy information.
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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