FICC Focus

Government bonds sold off in the past weeks, due to tariff news from the US and the debt brake being eased soon in Germany and this has increased the probabilities of rate cuts by central banks, including the Fed. Credit rallied through this mayhem and the big question is, will this strength continue? In this episode of our Credit Crunch podcast, host Mahesh Bhimalingam, Global Head of Credit Strategy at Bloomberg Intelligence, and Pierre Krief, Head of Credit at CDC (Caisse Des Depots ET Consignations) discuss tariffs and debt brake effect on inflation, growth and central bank policy, its impact on global credit and the challenges of taking a directional view after the big rates moves.

They discuss rates, yields and credit spreads along with curve steepening, the dollar weakness and their impact on credit.

“Even if we hear rumblings that NDAs are out there with third parties and private lenders are looking at assets,... we’re still in a position where — why wouldn’t they come back to us — because we have more to give,” said Patrick McGrath, partner at Anchorage Capital. “If I’ve invested in a structure and I have a group, I can give them more time. That’s valuable. I can address interest rates. I can probably provide the money a little bit cheaper and I can give them certainty as opposed to them saying I’m going to finance the business away.” McGrath sat down with Bloomberg Intelligence analysts Phil Brendel and Negisa Balluku at the Wharton Restructuring & Distressed Investing Conference last month (8:00). He dove into the intricacies of liability management exercises, including the asymmetry of information, discerning whether “deals away” are credible, and the importance of institutional reputation.

Prior to that, BI’s Noel Hebert and Brendel discuss how March may shake up complacent high yield and syndicated loan markets. The podcast concludes with a BI roundtable discussion covering J&J, Franchise Group, Spirit Airlines, Yellow, Ardagh, WW International, and Serta Simmons (1:14:20).

It’s back to the future in emerging-market debt, and creditors should look to the Cold War when analyzing geopolitical risk in global fixed-income portfolios. Michael Cirami, Managing Director at Artisan Partners and a portfolio manager for EMsights Capital Group, joins Bloomberg Intelligence Chief Emerging Markets Credit Strategist Damian Sassower to discuss his company’s approach to investing across the emerging and frontier debt markets. Cirami and Sassower assess the potential for alpha generation in EM fixed income, from off-benchmark positioning and idiosyncratic risk to shifting inflation dynamics and deteriorating growth expectations.

The weakening path recently observed through US survey evidence has yet to be confirmed by a sustained turn in the core economic news flow, but if confirmed, this could entertain a more bearish dollar outlook than envisaged at the start of the year. In this episode of FX Moment, Bloomberg Intelligence’s chief G-10 FX strategist Audrey Childe-Freeman and Valentin Petrescou, senior portfolio manager at Lombard Odier Investment Managers, discuss the US dollar outlook amid an ever-evolving tariff narrative, with Petrescou arguing that a trade war scenario may not be all that dollar bullish in the current economic cycle. The two also discuss the merits of yen exposure in FX diversification strategies and conclude a euro-dollar parity scenario is fading.

Hybrid capital solutions may aid small and medium enterprise companies confronting balance-sheet challenges amid persistently high borrowing costs. Ari Lefkovits, managing partner at Delos Capital, joins Bloomberg Intelligence’s credit strategists Noel Hebert and Sam Geier on this episode of the Credit Crunch podcast to discuss trends in private credit markets, and Delos’ advisory and principal investment approach. The conversation digs into the adoption of co-op agreements between lenders, transformations in the default process, hybrid capital benefits as well as inflation and tariff impacts. 

A spate of economic and political headlines has traders working harder than usual to assess US indicators for clues on interest rates and property markets. In this episode of the Bloomberg Intelligence Macro Matters Podcast, Lisa Pendergast, president and CEO of CREFC, joins host and BI chief US rates strategist Ira Jersey, senior REIT analyst Jeffrey Langbaum and senior US and Canada rates strategy associate Will Hoffman to discuss all things commercial real estate. They discuss changes in sentiment post-Covid-19 and relative value across market segments. They also examine the potential for continued office-space conversions, and how the industry is approaching its maturity wall with the Federal Reserve on hold.

The Macro Matters podcast is part of BI’s FICC Focus series.

Atanas Bostandjiev, founder & CEO of Gemcorp Capital Management, joins BI chief emerging markets fixed-income strategist Damian Sassower to discuss his firm’s approach to engineering performance and mitigating risk in emerging and frontier markets. Securitization expertise is critical when extending private credit to local operators across emerging markets, with heavy focus on principal protection and repayment. Bostandjiev and Sassower examine loan structuring, deal flow, exit strategies and currency risk, as foreign creditors’ appetite for incremental carry extends to EM.

There has been a lot of information for the market to digest so far this year and rates volatility has drifted lower with the Fed on hold for now, while elevated US economic policy uncertainty has helped support VIX. In this edition of the All Options Considered podcast, BI’s Chief Global Derivatives Strategist Tanvir Sandhuis joined byChris Murphy, Co-Head Derivative Strategy atSusquehanna, to discuss cross-asset volatility and flows. 

Catastrophe bonds offer issuers additional capacity for underwriting risk, while providing investors with a stream of uncorrelated returns. Bloomberg Intelligence analysts Noel Hebert and Sam Geier are joined by Tarek Abou Zeid and Andre Rzym, partners and portfolio managers at Man AHL to discuss the growth and adoption of cat bonds. The discussion gets into real-world examples, from Hurricanes Andrew and Milton, to the 2006 FIFA World Cup. They also talk about primary vs. secondary markets, payout structures, cybersecurity and terrorism, target investors and much more.

Despite economic data once again signaling inflation is on the rise, the future of rate cuts becoming uncertain and an evolving fiscal-policy landscape, there’s much to be optimistic about within the muni market. On this month’s Masters of the Muniverse podcast, hosts and Bloomberg Intelligence analysts Eric Kazatsky and Karen Altamirano talk to Tim Coffin, Director of Sustainability at Breckinridge Capital Advisors. We discuss the rise in separately managed accounts and how the demand for sustainable investing is unlikely to wane.