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

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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 

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Magnetar Capital is scouring a $600 billion pile of troubled corporate bonds and loans for value as much of the debt comes due. “Yesterday’s buyout boom is today’s credit opportunity,” Austin Camporin, head of special situations at the $17 billion alternative asset manager, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Negisa Balluku in the latest Credit Edge podcast. “It’s those small firms that incurred debt in the zero interest rate environment, primarily in the broadly syndicated loan market, that are obviously having a harder time,” Camporin says. They also discuss private credit risk and investment opportunities in software, healthcare services, building materials and packaging.

Magnetar Capital is scouring a $600 billion pile of troubled corporate bonds and loans for value as much of the debt comes due. &ldquo;Yesterday&rsquo;s buyout boom is today&rsquo;s credit opportunity,&rdquo; Austin Camporin, head of special situations at the $17 billion alternative asset manager, tells Bloomberg News&rsquo; James Crombie and Bloomberg Intelligence&rsquo;s Negisa Balluku in the latest Credit Edge podcast. &ldquo;It&rsquo;s those small firms that incurred debt in the zero interest rate environment, primarily in the broadly syndicated loan market, that are obviously having a harder time,&rdquo; Camporin says. They also discuss private credit risk and investment opportunities in software, healthcare services, building materials and packaging.

Magnetar Scours $600 Billion Stressed Debt Pile for Bond, Loan Value

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Tech Debt Binge Is Just Getting Started

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