Corporate collapse and allegations of fraud hog the headlines, but a slumping US economy is much more troubling for debt markets, according to Monarch Alternative Capital. “There are large portions of the economy that are hurting,” Adam Sklar, the firm’s co-chief investment officer, tells Bloomberg News’ Irene Garcia Perez and Bloomberg Intelligence’s Negisa Balluku in the latest Credit Edge podcast. “That is a more notable element to the corporate-credit story right now than super-loose underwriting or fraud,” Sklar says. They also discuss private credit stress, opportunity in auto, chemicals and packaging debt and risks to software companies.

Corporate collapse and allegations of fraud hog the headlines, but a slumping US economy is much more troubling for debt markets, according to Monarch Alternative Capital. &ldquo;There are large portions of the economy that are hurting,&rdquo; Adam Sklar, the firm&rsquo;s co-chief investment officer, tells Bloomberg News&rsquo; Irene Garcia Perez and Bloomberg Intelligence&rsquo;s Negisa Balluku in the latest Credit Edge podcast. &ldquo;That is a more notable element to the corporate-credit story right now than super-loose underwriting or fraud,&rdquo; Sklar says. They also discuss private credit stress, opportunity in auto, chemicals and packaging debt and risks to software companies.

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

Monarch Sees Bigger Hazard Than Fraud 

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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.

Loose underwriting standards are increasingly troubling for private credit market participants, according to Bloomberg Intelligence. &ldquo;This concern has been growing for a period of time,&rdquo; David Havens, BI&rsquo;s senior analyst for private credit, tells Bloomberg News&rsquo; 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. &ldquo;Headlines are still going to be negative, focused on that very small portion of the market &mdash; it&rsquo;s becoming slightly infectious and weighing on the wealth side of the business,&rdquo; 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.

Private Credit Has a Weak Underwriting Discipline Problem

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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.

JPMorgan Asset Management sees value in the debt of companies building out AI, but it&rsquo;s keeping a close eye on how much more they plan to spend next year. &ldquo;If we&rsquo;re seeing capex increase at the same rate that we saw 2025 to 2026, I think that&rsquo;s probably a little bit of a red flag,&rdquo; Stephanie Doyle, a portfolio manager at the $4.3 trillion firm, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Arnold Kakuda in this episode of the Credit Edge podcast. &ldquo;I think the issuance is an opportunity,&rdquo; said Doyle, who&rsquo;s part of the money manager&rsquo;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.

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

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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.

Secondary trading of private credit is on track to more than double last year&rsquo;s record volume, according to HarbourVest Partners. &ldquo;Through the first quarter we&rsquo;re run-rating above $50 billion this year,&rdquo; Greg Ciesielski, the $150 billion global private markets firm&rsquo;s head of credit secondaries, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Jean-Yves Coupin in this episode of the Credit Edge podcast. &ldquo;It&rsquo;s certainly a buyer&rsquo;s market at the moment, which is what you generally see in dislocation,&rdquo; 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.

HarbourVest Expects Private Credit Secondaries Volume to Double

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/924c51d5-1c60-48c0-a53e-b44301386547/transcript

Monarch Sees Bigger Hazard Than Fraud

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