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.

Razor-thin debt spreads underpin the global investor push into private markets, which can pay significantly more, according to Blackstone. &ldquo;We see excess spread in private credit,&rdquo; Michael Zawadzki, chief investment officer of Blackstone Credit &amp; Insurance, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s David Havens in the latest Credit Edge podcast. &ldquo;That&rsquo;s a really attractive thing for our clients around the world,&rdquo; 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.

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.

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.

The Credit Edge by Bloomberg Intelligence

Blackstone Says Private Credit Pays a Lot Better Than Liquid Debt Markets

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TCW’s $160 billion fixed-income group has slashed credit risk to the lowest in three decades amid valuation and contagion concerns. “Look back over the last 30 years — you would not find a period where we had less exposure to both investment-grade and high-yield bonds as we do today,”Bryan Whalen, the group’s chief investment officer, tells Bloomberg News’James Crombie and Bloomberg Intelligence’sJody Lurie in the latest episode of the Credit Edge podcast. They also discuss the potential for distress in debt rated CCC to spread to other parts of the corporate debt market. “That is the weakest borrower, and they cry uncle first,” says Whalen, referring to CCCs. “Make no mistake about it — your single B borrower is going to feel it next, and then your double B borrowers.”

TCW&rsquo;s $160 billion fixed-income group has slashed credit risk to the lowest in three decades amid valuation and contagion concerns. &ldquo;Look back over the last 30 years &mdash; you would not find a period where we had less exposure to both investment-grade and high-yield bonds as we do today,&rdquo;Bryan Whalen, the group&rsquo;s chief investment officer, tells Bloomberg News&rsquo;James Crombie and Bloomberg Intelligence&rsquo;sJody Lurie in the latest episode of the Credit Edge podcast. They also discuss the potential for distress in debt rated CCC to spread to other parts of the corporate debt market. &ldquo;That is the weakest borrower, and they cry uncle first,&rdquo; says Whalen, referring to CCCs. &ldquo;Make no mistake about it &mdash; your single B borrower is going to feel it next, and then your double B borrowers.&rdquo;

TCW Chops Credit Risk to Lowest in 30 Years as CCCs ‘Cry Uncle’

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/438e5ddd-4f02-4557-99c7-b4e4012fad94/transcript

Blackstone is looking to more than double its $40 billion systematic credit business, which uses models to crunch data and build portfolios. “This can and should be a $100 billion business if you look at us compared to other large traditional discretionary fixed-income managers,” Adam Dwinells, Blackstone Credit & Insurance’s head of corporate bond strategies, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jean-Yves Coupin in this episode of the Credit Edge podcast. He expects systematically managed portfolios to rise to 20%-25% of the market, matching equities, from about 1%-2% in US corporate credit now. “You could certainly see something on that order of magnitude in credit eventually. Maybe not over the next couple of years, but over the next decade,” he adds.

Blackstone is looking to more than double its $40 billion systematic credit business, which uses models to crunch data and build portfolios. &ldquo;This can and should be a $100 billion business if you look at us compared to other large traditional discretionary fixed-income managers,&rdquo; Adam Dwinells, Blackstone Credit &amp; Insurance&rsquo;s head of corporate bond strategies, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Jean-Yves Coupin in this episode of the Credit Edge podcast. He expects systematically managed portfolios to rise to 20%-25% of the market, matching equities, from about 1%-2% in US corporate credit now. &ldquo;You could certainly see something on that order of magnitude in credit eventually. Maybe not over the next couple of years, but over the next decade,&rdquo; he adds.

Blackstone Is Predicting a Big Surge in Quant Credit Investing

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More private investors in distressed companies are looking to replace directors and take control, according to Kirkland & Ellis. “It’s a very important remedy — it candidly drives a lot of negotiation when things are distressed,” H.T. Flanagan, a debt finance partner at the law firm, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in the latest Credit Edge podcast. “I have seen folks explore this with greater frequency and execute it with greater frequency,” says Flanagan, who advises private debt funds and alternative lenders. They also discuss the outlook for liability management exercises, hybrid capital solutions and opportunities in defense, aerospace and financial services.

More private investors in distressed companies are looking to replace directors and take control, according to Kirkland &amp; Ellis. &ldquo;It&rsquo;s a very important remedy &mdash; it candidly drives a lot of negotiation when things are distressed,&rdquo; H.T. Flanagan, a debt finance partner at the law firm, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s David Havens in the latest Credit Edge podcast. &ldquo;I have seen folks explore this with greater frequency and execute it with greater frequency,&rdquo; says Flanagan, who advises private debt funds and alternative lenders. They also discuss the outlook for liability management exercises, hybrid capital solutions and opportunities in defense, aerospace and financial services.

Kirkland & Ellis Sees More Distressed Lenders Flipping Company Boards 

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/74c40eda-7687-4cd4-a36f-b4d601465d88/transcript

Blackstone Says Private Credit Pays a Lot Better Than Liquid Debt Markets

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