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

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/aaddb1f5-7e90-47cb-a7b9-b0990135293f/transcript

Third Point is getting ready to scoop up credit assets that others have to sell to raise liquidity as cracks in the market spread. “This is probably one of the most exciting times to be a credit investor,” Shalini Sriram, the hedge fund’s head of structured credit, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Erica Adelberg in this episode of the Credit Edge podcast. “You are seeing people trying to sell parts of the portfolio that they can,” says Sriram, who sits on the fund’s risk committee. They also discuss residential and commercial mortgage-backed securities, consumer finance and collateralized loan obligations.

Third Point is getting ready to scoop up credit assets that others have to sell to raise liquidity as cracks in the market spread. &ldquo;This is probably one of the most exciting times to be a credit investor,&rdquo; Shalini Sriram, the hedge fund&rsquo;s head of structured credit, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Erica Adelberg in this episode of the Credit Edge podcast. &ldquo;You are seeing people trying to sell parts of the portfolio that they can,&rdquo; says Sriram, who sits on the fund&rsquo;s risk committee. They also discuss residential and commercial mortgage-backed securities, consumer finance and collateralized loan obligations.

Third Point Is Looking to Buy as Others Sell Amid Rising Turbulence

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/5bd21d82-f769-4633-822a-b40b012b0233/transcript

Consumer discretionary companies are at risk of downgrades and default if the war in the Middle East drags on, according to Bloomberg Intelligence. “We’ll definitely see a bunch of companies that have been holding on finally shake out,” Jody Lurie, a BI credit analyst focused on leisure, travel and lodging, tells Bloomberg News’ James Crombie in this special episode of the Credit Edge podcast. Car rental firms, theme parks and smaller casinos are exposed as rising gas prices crimp consumer spending. The oil rally is a windfall for energy companies, though gains at larger operators may accrue more to equity investors than bondholders. The debt of smaller independent producers may perform better, says Spencer Cutter, who covers the sector for BI.

Consumer discretionary companies are at risk of downgrades and default if the war in the Middle East drags on, according to Bloomberg Intelligence. &ldquo;We&rsquo;ll definitely see a bunch of companies that have been holding on finally shake out,&rdquo; Jody Lurie, a BI credit analyst focused on leisure, travel and lodging, tells Bloomberg News&rsquo; James Crombie in this special episode of the Credit Edge podcast. Car rental firms, theme parks and smaller casinos are exposed as rising gas prices crimp consumer spending. The oil rally is a windfall for energy companies, though gains at larger operators may accrue more to equity investors than bondholders. The debt of smaller independent producers may perform better, says Spencer Cutter, who covers the sector for BI.

How to Position for a Long War in Iran

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/16897e62-69e7-4bec-ba01-b40901498607/transcript

Fear of software defaults amid AI disruption creates opportunity for high-yield debt buyers, according to Capital Group, which has $3.2 trillion under management. “Markets are adopting a bit of a shoot first ask questions later strategy when it comes to software,” said Shannon Ward, a fixed income portfolio manager who serves on the firm’s fixed income management committee. “There’s going to be some baby out with the bath water when it comes to the sector — and that means bargains can be had,” she tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Steve Flynn in this episode of the Credit Edge podcast. They also discuss how Paramount Skydance will reshape junk credit, leveraged loan default risks and the broader impact of private market stress.

Fear of software defaults amid AI disruption creates opportunity for high-yield debt buyers, according to Capital Group, which has $3.2 trillion under management. &ldquo;Markets are adopting a bit of a shoot first ask questions later strategy when it comes to software,&rdquo; said Shannon Ward, a fixed income portfolio manager who serves on the firm&rsquo;s fixed income management committee. &ldquo;There&rsquo;s going to be some baby out with the bath water when it comes to the sector &mdash; and that means bargains can be had,&rdquo; she tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Steve Flynn in this episode of the Credit Edge podcast. They also discuss how Paramount Skydance will reshape junk credit, leveraged loan default risks and the broader impact of private market stress.

Capital Group Spies High-Yield Software Opportunity in Debt Meltdown

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/916c020f-09cc-49c4-ad7c-b40401472654/transcript

Riskiest Junk-Bond Bets Pay Off; the AI Explosion

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