Technology companies flooding debt markets are just getting started on funding a $4 trillion artificial intelligence boom, according to Bloomberg Intelligence. “This is the tip of the iceberg,” Robert Schiffman, BI’s senior tech credit analyst, tells Bloomberg News’ James Crombie in this special episode of the Credit Edge podcast. “A lot will depend on at what pace industries are embracing AI technologies,” adds Anurag Rana, a senior BI equity analyst who also covers the sector. BI expects AI capital expenditure to exceed $4 trillion in the US through the end of 2030. The trio also discuss the impact of surging bond issuance on credit spreads, the appeal of very long-dated debt in a sector susceptible to disruption and the biggest risks for this year.

Technology companies flooding debt markets are just getting started on funding a $4 trillion artificial intelligence boom, according to Bloomberg Intelligence. &ldquo;This is the tip of the iceberg,&rdquo; Robert Schiffman, BI&rsquo;s senior tech credit analyst, tells Bloomberg News&rsquo; James Crombie in this special episode of the Credit Edge podcast. &ldquo;A lot will depend on at what pace industries are embracing AI technologies,&rdquo; adds Anurag Rana, a senior BI equity analyst who also covers the sector. BI expects AI capital expenditure to exceed $4 trillion in the US through the end of 2030. The trio also discuss the impact of surging bond issuance on credit spreads, the appeal of very long-dated debt in a sector susceptible to disruption and the biggest risks for this year.

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

 Tech Debt Binge Is Just Getting Started

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/10baaebc-3e94-4117-9128-b3ed01534476/transcript

Corporate loans signed when rates were low are increasingly hitting a wall as they come due, according to H.I.G Bayside. “There’s a level of discount in these stressed credits that we haven’t seen for a number of years,” Jackson Craig, who co-heads the credit-focused arm of H.I.G. Capital, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tim Riminton in this episode of the Credit Edge podcast. “The dislocations that are occurring and the discounts that original lenders are willing to take to shed troubled assets has grown,” says Craig, who focuses on distressed debt. They also discuss private credit defaults, trouble in the chemicals sector, forced selling by collateralized loan obligations and how liability management is adding pressure.

Corporate loans signed when rates were low are increasingly hitting a wall as they come due, according to H.I.G Bayside. &ldquo;There&rsquo;s a level of discount in these stressed credits that we haven&rsquo;t seen for a number of years,&rdquo; Jackson Craig, who co-heads the credit-focused arm of H.I.G. Capital, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Tim Riminton in this episode of the Credit Edge podcast. &ldquo;The dislocations that are occurring and the discounts that original lenders are willing to take to shed troubled assets has grown,&rdquo; says Craig, who focuses on distressed debt. They also discuss private credit defaults, trouble in the chemicals sector, forced selling by collateralized loan obligations and how liability management is adding pressure.

Distressed Buyer H.I.G. Sees Most Loan Distress in Years (Podcast)

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/f4cc8402-e16e-4503-a4a6-b3e80114df18/transcript

Investors underestimate the hazards in private debt, according to Pacific Investment Management Co. “There’s a lot of additional credit risk that people are often taking in some of these private situations that you kind of turn a blind eye to,” Christian Stracke, the $2.3 trillion asset manager’s president, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Noel Hebert in this episode of the Credit Edge podcast. “There is a fairly large overhang of problem loans that were made in years earlier this decade that will take years to burn through,” he adds. They also discuss deteriorating debt underwriting standards in the technology sector, Europe’s big defense investment opportunity and the “sell America” trade.

Investors underestimate the hazards in private debt, according to Pacific Investment Management Co. &ldquo;There&rsquo;s a lot of additional credit risk that people are often taking in some of these private situations that you kind of turn a blind eye to,&rdquo; Christian Stracke, the $2.3 trillion asset manager&rsquo;s president, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Noel Hebert in this episode of the Credit Edge podcast. &ldquo;There is a fairly large overhang of problem loans that were made in years earlier this decade that will take years to burn through,&rdquo; he adds. They also discuss deteriorating debt underwriting standards in the technology sector, Europe&rsquo;s big defense investment opportunity and the &ldquo;sell America&rdquo; trade.

Pimco’s President Says Private Debt Investors Are Blind to the Risks 

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/fe7c3b96-c525-4a4e-851a-b3e10149d98c/transcript

Pressure on highly-indebted companies will intensify as interest rates remain elevated, according to Seix Investment Advisors. “We have a lot of credit zombies — B3/B minus or CCC rated credits — that still have very weak interest coverage, generating zero free cash flow,” George Goudelias, chief investment officer of the firm’s leveraged finance platform, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jean-Yves Coupin in this episode of the Credit Edge podcast. “There are mine fields to avoid in this market,” he adds. They also discuss the impact of private credit on public leveraged finance, why Seix is bearish on technology and how rising “sell America” sentiment could affect corporate debt.

Pressure on highly-indebted companies will intensify as interest rates remain elevated, according to Seix Investment Advisors. &ldquo;We have a lot of credit zombies &mdash; B3/B minus or CCC rated credits &mdash; that still have very weak interest coverage, generating zero free cash flow,&rdquo; George Goudelias, chief investment officer of the firm&rsquo;s leveraged finance platform, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Jean-Yves Coupin in this episode of the Credit Edge podcast. &ldquo;There are mine fields to avoid in this market,&rdquo; he adds. They also discuss the impact of private credit on public leveraged finance, why Seix is bearish on technology and how rising &ldquo;sell America&rdquo; sentiment could affect corporate debt.

Seix Fears More Zombie Borrower Distress as Interest Rates Stay High

https://api.omny.fm/orgs/e73c998e-6e60-432f-8610-ae210140c5b1/clips/2f9374cc-3c3c-43a8-a8df-b3da014db8c0/transcript

Tech Debt Binge Is Just Getting Started

In 1 playlist(s)

The Credit Edge by Bloomberg Intelligence

Social links

Follow podcast

Recent clips