Vanguard Says Junk Bond Pricing Leaves Little Room for Negative Surprises
Vanguard Group, the world’s second-largest money manager, is wary of junk bonds given how expensive they’ve become. “Where the market is today doesn’t leave a lot of room for negative surprises,” Michael Chang, head of high-yield corporate credit at the $11 trillion asset manager, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Matthew Geudtner in the latest Credit Edge podcast. “Spreads are pretty tight, yields are about average — it’s not the best time to be investing in high yield,” Chang says. They also discuss Vanguard’s preference for debt from utilities and consumer staples companies, how to get extra yield from leveraged loans and how to profit from liability-management exercises.See omnystudio.com/listener for privacy information.
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Oaktree Worries About Lack of Discipline in Rush to Fund AI
Lack of discipline is a concern for credit markets as investors rush to fund artificial intelligence, according to Oaktree Capital Management. “Just how much money is chasing deals — I think you need to be mindful of that,” Danielle Poli, a portfolio manager for the firm’s global credit strategy, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Phil Brendel in the latest Credit Edge podcast. “What stands out is that anything with AI is just getting done,” Poli added. “A lot of the excess we’re seeing is in that space.” They also discuss where to find better returns in collateralized loan obligations, real estate debt, strategies for busted convertibles, private market relative value and opportunities in Europe. See omnystudio.com/listener for privacy information.
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DoubleLine Is Ringing Alarm Bells on the AI Debt Funding Bonanza
Credit investors should be careful about participating in the artificial intelligence boom, according to DoubleLine Capital. “You have to be not only cautious about the tech sector, but the tangential related sectors that are providing support for these new projects,” Robert Cohen, the firm’s director of global developed credit, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Robert Schiffman in the latest Credit Edge podcast. “Who knows what the spillover will be if the music stops?” Cohen added. They also discuss compressed returns in private debt markets, commercial mortgage-backed securities, how to invest in corporate bonds by duration, rating and sector — plus the outlook for 2026.See omnystudio.com/listener for privacy information.
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Crossmark Says Investors Are Too Complacent About Market Risks
Investors are too sanguine after shrugging off recent debt-market distress, according to Crossmark Global Investments. “My key concern is the complacency,” Victoria Fernandez, the firm’s chief market strategist, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Jean-Yves Coupin in the latest episode of the Credit Edge podcast. “Jamie Dimon talks about the cockroaches, but the investors don’t seem to care,” Fernandez says. They also discuss opportunity and risk in the build-out of AI infrastructure, health-care bond spreads, private credit troubles and the performance of values-based investments.See omnystudio.com/listener for privacy information.
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Monarch Sees Bigger Hazard Than Fraud
Corporate collapse and allegations of fraud hog the headlines, but a slumping US economy is much more troubling for debt markets, according to Monarch Alternative Capital. “There are large portions of the economy that are hurting,” Adam Sklar, the firm’s co-chief investment officer, tells Bloomberg News’ Irene Garcia Perez and Bloomberg Intelligence’s Negisa Balluku in the latest Credit Edge podcast. “That is a more notable element to the corporate-credit story right now than super-loose underwriting or fraud,” Sklar says. They also discuss private credit stress, opportunity in auto, chemicals and packaging debt and risks to software companies.See omnystudio.com/listener for privacy information.
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.
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