Fortune favors the bold in credit markets this year, with the biggest returns coming from the highest-risk debt. To analyze why and what’s next, we’re joined by Gowri Gurumurthy, a veteran high-yield bond reporter at Bloomberg News. Triple C rated bonds and leveraged loans are poised to extend gains barring a major geopolitical shock, while defaults will probably stay low, Gurumurthy says. Also in this episode of the Credit Edge, Bloomberg News senior editor James Crombie asks Bloomberg Intelligence analyst Robert Schiffman about the outlook for the technology sector amid an explosion in artificial intelligence. Nvidia is the poster child for AI, with huge potential to increase free cash flow, Schiffman says.

Fortune favors the bold in credit markets this year, with the biggest returns coming from the highest-risk debt. To analyze why and what’s next, we’re joined by Gowri Gurumurthy, a veteran high-yield bond reporter at Bloomberg News. Triple C rated bonds and leveraged loans are poised to extend gains barring a major geopolitical shock, while defaults will probably stay low, Gurumurthy says. Also in this episode of the Credit Edge, Bloomberg News senior editor James Crombie asks Bloomberg Intelligence analyst Robert Schiffman about the outlook for the technology sector amid an explosion in artificial intelligence. Nvidia is the poster child for AI, with huge potential to increase free cash flow, Schiffman says.

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

Riskiest Junk-Bond Bets Pay Off; the AI Explosion

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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 

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/34d6543e-8037-4446-a645-b44a01441080/transcript

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

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.

Rookie private lenders that have to sell in a downturn are a potential threat to credit markets, according to Citi. &ldquo;If the cycle turns and these tourists, rather than working out loans, just start selling them at below the economic value &mdash; what happens to the rest of the market?&rdquo; Mickey Bhatia, the firm&rsquo;s head of spread products, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Sam Geier in this episode of the Credit Edge podcast. &ldquo;That&rsquo;s a big worry,&rdquo; says Bhatia. They also discuss global fund flows, investment in AI infrastructure and expansion of electronic trading to incorporate collateralized loan obligations.

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

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/f74a664c-029d-4b56-8162-b43c015755fa/transcript

Riskiest Junk-Bond Bets Pay Off; the AI Explosion

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