The Credit Edge by Bloomberg Intelligence

Risky corporate debt markets have room to fall further to reflect the damage of ongoing trade wars, according to BlackRock, the $11.6 trillion money manager. “We’re likely to see spreads widen from here as we see further deterioration in risk assets,” Mitch Garfin, the firm’s co-head of leveraged finance, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Robert Schiffman in the latest Credit Edge podcast. “If this uncertainty continues for another quarter, two quarters, three quarters — that could lead to a more significant downturn.” Garfin and Schiffman also discuss private credit relative value, distressed exchanges, technology sector opportunities, portfolio trading and auto sector risk.See omnystudio.com/listener for privacy information.

Tariff chaos has tossed retailers into a crisis similar to Covid in 2020, leaving them unable to plan ahead, according to AlixPartners, the financial advisory and global consulting firm. “It’s a little crazy and retailers are canceling orders,” Holly Etlin, a partner at the firm and restructuring veteran, tells Bloomberg News’ Reshmi Basu and Bloomberg Intelligence’s Stephen Flynn in the latest Credit Edge podcast. There’s a “real crisis, everybody going nuts,” she added, referring to pricing, inventory and shipping decisions that retailers are trying to make. Etlin also discusses the impact of elevated bankruptcy costs, the outlook for more coercive liability management exercises, how retailers are using asset-based loans as a lifeline and the turnaround of Tailored Brands.See omnystudio.com/listener for privacy information.

Global market turmoil opens a window for credit investors in companies with too much debt, according to London-based Aptior Capital, which specializes in distressed debt and rescue finance. “All this volatility, it throws up even more opportunities,” founder Rudi Singh tells Bloomberg News’ Giulia Morpurgo and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. “These are very good businesses and it really has been the old adage of good company, bad cap structure.” Morpurgo and Alamutu also discuss the firm’s target of 20% returns, a shift to Europe by US investors, liability management, real estate and auto sector stress. This episode was recorded on April 2.See omnystudio.com/listener for privacy information.

Retail investors aren’t yet ready to jump on the private credit bandwagon, according to Janus Henderson. “The skepticism there should be real,” John Kerschner, the firm’s head of US securitized products, talking about exchange-traded funds focused on direct lending. “The underlying isn’t nearly as liquid and hasn’t really been tested throughout a real dislocation credit cycle,” Kerschner tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Spencer Cutter in the latest Credit Edge podcast. Kerschner and Cutter also discuss the outlook for the US economy and consumers, collateralized loan obligations, relative value in securitized credit and fund flows.See omnystudio.com/listener for privacy information.

Fundamental and technical pressures on credit markets are growing as trade wars escalate, according to JPMorgan Asset Management. “We just need to be paid a little bit more for the uncertainty risk now in the market,” says Lisa Coleman, the firm’s head of global investment-grade corporate credit. “The technicals from where we were at the beginning of the year have deteriorated,” Coleman, who manages $73 billion in assets, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jody Lurie in the latest Credit Edge podcast. Coleman and Lurie also discuss the earnings outlook for US companies, opportunities in consumer, health care and bank debt and fund flows.See omnystudio.com/listener for privacy information.

Global portfolio managers are seeking debt investment alternatives in China and Europe amid mounting volatility in America, according to CreditSights. “The US seems to be sneezing an awful lot lately and the rest of the world is saying, ‘Well how do we mask up and try to defend ourselves against this?” said Winnie Cisar, the firm’s global head of strategy. “If US exceptionalism is not on the table, then we’re going to have to go other places to look for opportunity,” Cisar tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Matthew Geudtner in the latest Credit Edge podcast. Cisar and Geudtner also discuss the impact on US borrowers of trade wars, the growing risk of stagflation and opportunities in the industrial sector, including Boeing bonds.See omnystudio.com/listener for privacy information.

Amid heightened volatility in American capital markets, there are more attractive private debt options elsewhere, according to alternative investment manager BC Partners. “In 25 years of doing this, it’s probably the first time we’re seeing actually decent relative value in Europe,” said Ted Goldthorpe, the firm’s head of credit. “The US has always provided better relative value in every environment — that’s kind of changed,” Goldthorpe tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Arnold Kakuda in the latest Credit Edge podcast. Besides specific European opportunities, Goldthorpe and Kakuda also discuss sports lending, the impact of tariffs on US mid-market borrowers, private loan valuations and the pipeline for acquisitions.See omnystudio.com/listener for privacy information.

Private credit is getting squeezed by excess demand for limited deals, but AllianceBernstein says it will continue to pay more than publicly traded debt. “Even as base rates have come in, that premium remains fairly persistent,” said Matthew Bass, the firm’s head of private alternatives. “If the premium gets too small, then as an investor, you’re going to start to question: ‘Why am I locking my capital up?’,” Bass tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu in the latest Credit Edge podcast. Bass and Alamutu also discuss recovery in commercial real estate, asset-based finance opportunities by sector and the advent of exchange-traded funds for private debt.See omnystudio.com/listener for privacy information.

The best credit opportunity lies in middle-market collateralized loan obligation equity, according to Carlyle. “It is a newer market and not everyone’s investing and chasing that asset class,” said Lauren Basmadjian, the firm’s global head of liquid credit. “We’re seeing mid-to-high teens IRRs,” Basmadjian tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Mike Campellone in the latest Credit Edge podcast. That compares to 12%-13% internal rates of return from CLOs backed by broadly syndicated loans, she adds. Basmadjian and Campellone also discuss growing risk from liability management exercises, private/public debt convergence, default rates, M&A and European leveraged loan market opportunities.See omnystudio.com/listener for privacy information.

As trade wars intensify, inflation persists and geopolitical risks spread, Pimco is finding value in the debt of large US banks and leisure-sector companies. “There are some really strong spots within lodging, cruise lines and the like,” said Sonali Pier, who focuses on multi-sector credit opportunities and is a senior member of the $2 trillion asset manager’s leveraged finance team. Pimco is meanwhile cautious on retail and autos, especially in Europe, Pier tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jody Lurie, in the latest Credit Edge podcast. Pier and Lurie also discuss private debt relative value, asset-based finance opportunities and how to navigate creditor conflict when borrowers fall into distress.See omnystudio.com/listener for privacy information.

Goldman Sachs is advising credit investors to protect against losses amid expensive valuations and rising geopolitical turmoil. “The cost of hedging is the lowest it’s been in probably a very long time — use that to your advantage,” said Lotfi Karoui, the firm’s chief credit strategist. “Look at that left tail of the distribution — the known unknowns, the unknown unknowns, the things that can take you off guard,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Robert Schiffman, in the latest Credit Edge podcast. Despite this, Goldman is positive on the corporate debt market outlook, given very strong demand for limited supply, and sees opportunities at the single name level. Karoui and Schiffman also discuss “absolutely remarkable” value in mortgage-backed securities, the default rate, private market relative value, downgrade risk from a forecast pick up in dealmaking and European bond opportunities.See omnystudio.com/listener for privacy information.

Corporate debt is well placed to withstand global turmoil caused by new US trade policy, according to Crescent Capital Group. “There is going to be a lot of volatility, but I think the markets are now becoming more accustomed to not reacting to those headlines,” said Chris Wright, the firm’s president and head of private debt. “Credit markets are pretty stable,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Julie Hung, in the latest Credit Edge podcast. Wright highlights pro-growth policies of the new US administration and presence of business-friendly people in very senior roles, and views tariff announcements as a negotiating tactic. Wright and Hung also discuss inflation, consumer trends, private debt returns and default risks, as well as the need for scale to compete in direct lending.See omnystudio.com/listener for privacy information.

As rates stay high, bank lenders retreat and volatility rises, Gramercy Funds Management sees significant growth in private credit to developing nations. “We’re just scratching the surface in emerging markets,” said Robert Koenigsberger, the firm’s founder, chief investment officer and managing partner, referring to private debt. “It’s really exciting to go deeper and broader in EM as an asset class with the tools that have proven to work already,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Tolu Alamutu, in the latest Credit Edge podcast. Koenigsberger and Alamutu also discuss EM private debt returns, default risks, real estate investment strategies, US tariffs and trade policy, as well as recent deals in Mexico and Turkey.See omnystudio.com/listener for privacy information.

UK-based Pemberton Asset Management has widened its scope to stay ahead in the increasingly competitive world of private credit. “You’ve got to have a range of products that people think are relevant and attractive,” said Symon Drake-Brockman, the firm’s co-founder and managing partner, referring to net asset value financing, collateralized loan obligations and risk sharing, among other businesses. “We can build large verticals in each one of those strategies,” he tells Bloomberg News’ James Crombie and Silas Brown, and Bloomberg Intelligence’s Jeroen Julius, in the latest Credit Edge podcast. Drake-Brockman and Julius also discuss relative value between US and European private credit, areas of stress and whether US deregulation will boost competition from traditional lenders. “If you’re a chief executive of bank, you’ve got to make sure the pendulum doesn’t swing back the other way in four years’ time,” said Drake-Brockman.See omnystudio.com/listener for privacy information.

Centerbridge Scans Consumer Pain as Inflation Lingers (Podcast)Stubbornly high prices are a threat to consumers that could bleed through to credit markets, according to Centerbridge. “The rising cost of goods and interest rates will have an impact,” said Aaron Fink, the firm’s head of asset finance. “To the extent we see deterioration in jobs, and in the labor market more broadly, that’ll be problematic,” he tells Bloomberg News’ James Crombie and Carmen Arroyo, and Bloomberg Intelligence’s Himanshu Bakshi in the latest Credit Edge podcast. Despite this, Centerbridge still sees significant opportunity in consumer finance. Fink and Bakshi also discuss how a new US administration will affect private credit via trade policy and regulation, growth in fundraising from private wealth and retail, as well as investment in data centers to support artificial intelligence.See omnystudio.com/listener for privacy information.

Debt spreads are set to tighten further as demand for yield rises and net supply remains constrained, according to First Eagle Alternative Credit, which is cautious about the year ahead. “Stay conservative — that’s the mantra that we’re operating under,” said Jim Fellows, the firm’s co-president and chief investment officer, referring to leveraged loans, private credit and high-yield bonds. “You don’t see a lot of screaming value,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence senior credit analyst David Havens in the latest Credit Edge podcast. Havens and Fellows also discuss opportunity in asset-based lending, middle-market loan pricing and covenant trends, as well as the outlook for buyout finance and private credit defaults.See omnystudio.com/listener for privacy information.

A sustained period of elevated interest rates has the potential to cause pain in the fastest-growing part of corporate debt, according to RBC Global Asset Management. “We are concerned about how the direct lending private credit space would deal with a higher-for-longer world,” said Andrzej Skiba, the firm’s head of US fixed income. “You’re much better off in public markets because the leverage profile, the interest coverage ratios are just so much better,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence senior credit analyst Mike Holland, in the latest Credit Edge podcast. Holland and Skiba also discuss value in financial-sector debt, technology and media bond opportunities, coercive liability management exercises and 2025 bond market returns.See omnystudio.com/listener for privacy information.

Private credit could become a $40 trillion market in five years, according to Apollo Global Management. “We’re going to get there really soon,” Akila Grewal, the firm’s global head of credit product, tells Bloomberg News’ James Crombie and Bloomberg Intelligence analyst Matt Geudtner in the latest Credit Edge podcast. Currently, “we estimate it’s a $20 trillion market,” she adds, referring to asset-based finance. Grewal and Geudtner also discuss relative risk and returns between public and private markets, retail investment, real estate opportunities, advantages for borrowers to raising capital privately and the fundraising environment. See omnystudio.com/listener for privacy information.

Credit spreads are poised to hit record tight levels in the first quarter, even as debt issuance rises, according to participants in this special 2025 outlook edition of the Credit Edge podcast, hosted by Bloomberg’s James Crombie. We discuss bonds, loans, private credit — and bourbon — with the following guests: Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research; Ana Arsov, global head of private credit at Moody’s; Matt Brill, Invesco’s head of North America investment-grade credit; Meghan Robson, BNP Paribas’ head of US credit strategy; Meghan Graper, global head of debt capital markets at Barclays; Winnie Cisar, global head of strategy at CreditSights; Matt Mish, head of credit strategy at UBS; Oleg Melentyev, Bank of America’s head of high-yield credit strategy; and Aidan Cheslin, senior credit analyst at Bloomberg Intelligence.See omnystudio.com/listener for privacy information.

Swelling demand for limited supply of corporate bonds and loans could spell trouble for credit markets, according to PineBridge Investments. “The thing that gives me a lot of pause right now — and some concern — is the lack of net new supply versus the amount of demand out there,” said Jeremy Burton, the firm's portfolio manager for US high yield and leveraged loans. “That leads to the risk that the market as a whole will make subpar credit decisions,” he tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst Jody Lurie, in the latest Credit Edge podcast. Burton and Lurie also discuss the state of the consumer, default rates, coercive liability management, as well as risks in the media, health care and software sectors.See omnystudio.com/listener for privacy information.

Real estate and private equity are a better investment than direct lending, according to JPMorgan Asset Management. Those two have repriced on higher rates, while private credit hasn't, Gabriela Santos, the firm's chief market strategist for the Americas tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst Robert Schiffman, in the latest Credit Edge podcast. “It's been interesting to see signs that actually commercial real estate seems to be bottoming and turning around,” said Santos. Santos and Schiffman also discuss the likelihood of bond spreads staying tight, CCC bond risk, the market impact of trade wars and the technology sector debt outlook.See omnystudio.com/listener for privacy information.

Homeowners cashing out after a surge in real estate prices presents a major opportunity for debt investors, according to TPG Angelo Gordon. “We're seeing the evolution of home equity products,” said TJ Durkin, the firm's head of structured credit and specialty finance. “There could be $150 to $200 billion of origination per year, with a $2 trillion really addressable market there,” Durkin tells Bloomberg News' James Crombie and Carmen Arroyo, and Bloomberg Intelligence senior credit analyst David Havens in the latest Credit Edge podcast. Durkin and Havens also discuss private debt, asset-based finance, commercial real estate, M&A and residential solar energy.See omnystudio.com/listener for privacy information.

Private credit to risky borrowers that need a lifeline is poised to boom as rates stay high, according to Oaktree Capital Management. “You're going to see a lot of what they call rescue financing,” said David Rosenberg, head of liquid performing credit at Oaktree. “That's going to be one of the greatest opportunities we've seen in a decade.” Loans to troubled companies will focus on sectors that have seen most leveraged buyout activity, like technology and health care, Rosenberg tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst Jean-Yves Coupin in the latest Credit Edge podcast. Rosenberg and Coupin also discuss liability management, creditor-on-creditor violence, private debt stress, the M&A outlook, European investment opportunities and geopolitical risks.See omnystudio.com/listener for privacy information.

Sustainable finance can keep growing despite potential headwinds from the next US administration, according to Nikko Asset Management. “If the political side is not asking for disclosure on strategies and updates on ESG, we as portfolio managers have to ask,” said Holger Mertens, Nikko's head of global credit, referring to environmental, social and governance standards. “It's our job to make sure we're buying assets at the right price,” Mertens tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst Tolu Alamutu in the latest Credit Edge podcast. Mertens and Alamutu also discuss ESG debt returns, energy transition, issuance forecasts and real estate risks such as stranded assets.See omnystudio.com/listener for privacy information.

The US economy heading for a potentially “turbulent landing” may spell trouble for junk bonds, according to Colleen Cunniffe, head of global taxable credit research at Vanguard. “We're actually relatively cautious on high yield at the moment from a broad perspective,” Cunniffe tells Bloomberg News' James Crombie and Bloomberg Intelligence's Himanshu Bakshi in the latest Credit Edge podcast. The world's second-largest asset manager prefers debt rated BBB, bonds from utilities and banks, as well as asset-backed securities in the auto sector. Cunniffe and Bakshi also discuss commercial mortgage-backed securities, the impact of consumer stress on bank asset quality and emerging markets. See omnystudio.com/listener for privacy information.

Lending directly to middle-market US-based companies is the best opportunity in credit markets, offering double-digit yields, according to Randy Schwimmer, vice chairman at Churchill Asset Management. “We probably only have a small handful of lenders that we're competing against,” Schwimmer tells Bloomberg News' James Crombie and Bloomberg Intelligence's Mike Holland in the latest Credit Edge podcast. “This right now is undiscovered value that is hiding in plain sight,” added Schwimmer, whose firm specializes in mid-market debt deals. Schwimmer and Holland also discuss loan margin and covenant trends, fundraising, private credit innovation, the impact of higher-for-longer rates and regulation. See omnystudio.com/listener for privacy information.

Reports of active management's demise have been greatly exaggerated. Active continues to grow and evolve in ETFs while mutual funds prosper and define benefit plans. Bloomberg Intelligence strategy team uncover active opportunities and glean insights from active managers and those who cover the industry. Listen to Inside Active by Bloomberg Intelligence. See omnystudio.com/listener for privacy information.

High-grade US corporate bond issuance will rise again in 2025, building on this year's record-setting pace, according to Goldman Sachs. “There's a lot of growth in the economy that needs to take place, as well as all of the refi,” Jonny Fine, Goldman's global head of investment grade debt tells Bloomberg News' James Crombie and and Bloomberg Intelligence's Arnold Kakuda in the latest Credit Edge podcast. Refinancing will account for the bulk of the sales, while infrastructure finance and buyouts will boost volume as the economy expands. Fine and Kakuda also discuss the rise of private credit, how regulation and Basel endgame will affect bond markets and the differences between bank financing in the US and Europe, including Additional Tier 1 bonds. See omnystudio.com/listener for privacy information.

Private debt doesn't offer high enough returns to justify the growing risks, according to Pimco. “Fundamentals are deteriorating in more levered portions of the credit markets,” said Mohit Mittal, chief investment officer for core strategies at Pimco. “You're seeing more complacency, so you have to be very thoughtful, you have to be very careful.” Investment-grade direct lending pays only half the premium needed to compensate for worse liquidity than in public markets and rising fundamental concerns, Mittal tells Bloomberg News' James Crombie and Irene Garcia Perez and Bloomberg Intelligence's Stephen Flynn in the latest Credit Edge podcast. Mittal and Flynn also discuss the outlook for the telecoms and the cable media sector, including consolidation and deleveraging. See omnystudio.com/listener for privacy information.

Schroders Capital is seeing growing interest in private debt from investors looking to diversify as returns in public markets decline. It's finding the best relative value in commercial real estate where over-exposed regional banks can no longer lend. “The most interesting opportunity, I think is looking where there's emotional bias and fear,” says Michelle Russell-Dowe, co-head of private debt and credit alternatives at the asset manager, in the latest Credit Edge podcast. Schroders also likes residential real estate and equipment finance, Russell-Dowe tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst David Havens. Russell-Dowe and Havens also discuss new investors in private credit like retail, high-net-worth individuals and family offices. See omnystudio.com/listener for privacy information.

Blackstone Inc. expects private credit to balloon to $30 trillion in size, fueled by the energy transition, housing and data center lending. “We're really expanding the opportunity set from quite a narrow part of the market to really a mainstream part,” said Rob Horn, global head of infrastructure and asset-based credit at Blackstone. “Not only can we get hard-asset collateral — which differs from what they get in the public market — but we also get a premium return,” Horn tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst Tolu Alamutu in the latest Credit Edge podcast. Horn and Alamutu also discuss the outlook for residential real estate. “It's still going to be a decent year, despite the fact that we have this troubling geopolitical risk backdrop,” says Alamutu. See omnystudio.com/listener for privacy information.

The $1.7 trillion private credit market faces several challenges after years of rapid growth, according Ana Arsov, global head of private credit at Moody's Ratings. “It's going to be very important to get more transparency from the banks about is there some kind of synthetic leverage, additional leverage, coming to this market,” Arsov tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst David Havens in the latest Credit Edge podcast. Arsov and Havens also debate the impact of exchange-traded funds and broader implications of private debt stress. “It just doesn't seem like the risk-transmission mechanism is nearly as potent in the way that private credit is structured today, as it has been in maybe some other areas that have caused systemic problems in the past,” says Havens.See omnystudio.com/listener for privacy information.

Investing, stocks, commodities, crypto and everything in between. This biweekly podcast with a focus on exchange-traded funds will guide you through the financial markets in Asia and beyond. Sponsored by HKEX.See omnystudio.com/listener for privacy information.

Victory for Kamala Harris in the US election would boost the bonds of basic industries, capital goods companies and utilities, according to Matt Mish, head of credit strategy at UBS. “A lot of that we think is tied to the preservation of the inflation reduction act and support of many of the Biden-era stimulus policies,” Mish tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst Julie Hung in the latest Credit Edge podcast. Conversely, a win for Democrats would be a drag on debt in the telecoms, tech, banks and auto sectors. Victory for Donald Trump would be positive for energy, autos and aerospace defense, Mish adds. Also in this episode, Mish and Hung debate the outlook for US consumers and stress in private credit markets. See omnystudio.com/listener for privacy information.

As commercial real estate continues to menace banks and investors, Goldman Sachs Asset Management is leaning into the debt. “What we've been able to do is find a lot of opportunities in commercial mortgage-backed securities,” Lindsay Rosner, head of multi-sector investing at the company, told Bloomberg News' James Crombie and Bloomberg Intelligence credit analyst Jody Lurie in the latest Credit Edge podcast. “It's a good portion of our portfolio, and we think it generates a decent amount of carry.” In this episode, Rosner and Lurie also debate the outlook for retail and leisure sector companies as lower-income US consumers come under pressure.See omnystudio.com/listener for privacy information.

Funding companies with unsustainable debt loads has been “the best opportunity in the corporate credit market over the last year or two,” Jimmy Levin, Sculptor Capital Management's chief investment officer, says in Bloomberg Intelligence's Credit Edge podcast. Separately, Sculptor expects substantial growth in asset-based finance, where Levin sees double-digit returns, he tells Bloomberg News' James Crombie and Irene Garcia Perez, and BI credit analyst Stephane Kovatchev. Also in this episode, Levin and Kovatchev discuss the outlook for rates, the resilience of US consumers and positioning in the debt of cyclical industrial companies. See omnystudio.com/listener for privacy information.

Norinchukin Bank faces significant losses from the sale of US and European sovereign bonds that tumbled as interest rates rose, and other financial institutions may also be exposed. “The bank is still losing more than a billion dollars a quarter,” says Bloomberg Intelligence senior credit analyst Pri de Silva, referring to the Japanese agricultural bank also known as Nochu. “They need to rip that band aid off and address negative carry in the securities portfolio,” de Silva tells Bloomberg News' James Crombie in the latest Credit Edge podcast. De Silva also weighs the outlook for Asia's Additional Tier 1 bond market, where risk premia are shrinking as supply evaporates. Also in this episode, Mary Ellen Olson, senior credit analyst at Bloomberg Intelligence, discusses the turnaround at India's Vedanta, which may tap the US dollar bond market, as well as the impact of China's economic slowdown on Asian miners. See omnystudio.com/listener for privacy information.

Lending to law firms against portfolios of legal assets can generate hefty returns, according to North Wall Capital, the London-based credit investor. “We target 25%-plus IRRs, and we have historically outperformed that,” Fabian Chrobog, its chief investment officer and founder, says in Bloomberg Intelligence's Credit Edge podcast. Separately, North Wall aims to make “mid teens” gains in middle-market private credit, Chrobog tells Bloomberg News' James Crombie and BI senior credit analyst Tolu Alamutu. Also in this episode, Chrobog and Alamutu discuss creditor protections, real estate opportunity and the advantages of geographical diversification. “I can see the returns in the US decreasing while I can see still some really interesting opportunities in Europe,” says Chrobog. See omnystudio.com/listener for privacy information.

AllianceBernstein sees opportunity in European and emerging market credit markets and is steering clear of energy sector debt. “High-quality European high yield, on a dollar-hedged basis, is attractive,” Will Smith, director of U.S. high-yield credit at AllianceBernstein, says in the latest Credit Edge podcast from Bloomberg Intelligence. In EM corporate bonds, “you're getting paid a lot more risk premium there — a lot more in spreads than you are in developed market credit markets,” Smith tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst Spencer Cutter. Smith and Cutter also discuss relative value and risks in oil and gas company debt. “Your antenna goes off when energy companies start returning capital to shareholders,” says Smith. See omnystudio.com/listener for privacy information.

There are potential catalysts for the debt of cruise lines like Carnival and Royal Caribbean, as well as Rolls Royce and Ford, according to Bloomberg Intelligence. BI senior analysts Stephen Flynn and Aidan Cheslin join James Crombie of Bloomberg News in this edition of BI's Credit Edge podcast to discuss the outlook for US and European credit, identifying situations where their teams' research differs with consensus. UBS and Jaguar Land Rover have bonds trading wide to peers that could tighten, while others like Disney and Chesapeake face significant headwinds. Flynn and Cheslin also discuss the macroeconomic and geopolitical outlook and risks of a broad credit-market correction. “There seems to be a lack of confidence in the rarefied valuation levels we're at,” said Cheslin. “That's something that can unwind pretty quickly.” Please note: The Credit Edge podcast is going on vacation, and won't be published Aug. 8. The next episode will be on Aug. 15.See omnystudio.com/listener for privacy information.

Small-cap US companies are at risk of default as debt comes due and the economy slows, according to Alan McKnight chief investment officer at Regions Bank. “Look at the Russell 2000 — over 50% of those names are non-earners right now. They're actually unprofitable,” McKnight says in the latest Credit Edge podcast from Bloomberg Intelligence. “There's a lot of names in that sort of realm that could be on the tipping point, particularly in light of when they have to refinance their debt,” he tells Bloomberg News' James Crombie and Bloomberg Intelligence credit analyst Matthew Geudtner. McKnight sees particular stress on companies exposed to low-income US consumers. McKnight and Geudtner also discuss opportunities in the industrial and defense sectors, including major borrowers like Honeywell and Lockheed Martin. See omnystudio.com/listener for privacy information.

Antares Capital, the US-based private credit firm, is looking to expand in Europe and also sees opportunity in real estate, infrastructure and asset-backed finance. “In order to scale, we'd probably need to do an acquisition,” Tim Lyne, the direct lender's chief executive officer, says in the latest Credit Edge podcast from Bloomberg Intelligence. “We are constantly evaluating Europe,” he tells Bloomberg News' James Crombie and Bloomberg Intelligence senior credit analyst David Havens. Lyne and Havens also discuss Antares' funding strategy, areas of market stress, fundraising and the broadening of the private credit investor base. “You're beginning to see this democratization of the asset class,” says Lyne.See omnystudio.com/listener for privacy information.