The Credit Edge by Bloomberg Intelligence

Neuberger Sees More Gain Than Pain in Private Debt Market

Despite all the negative headlines around private credit, Neuberger Berman says direct loans pay a lot more than traded debt and barely make a loss. “We pretty consistently see a 200 basis point differential,” Susan Kasser, the gobal investment management firm’s head of private debt, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in this episode of the Credit Edge podcast. “Our annualized loss rates are one basis point,” she adds. They also discuss how artificial intelligence helps to pinpoint investment opportunities and why private markets will probably continue to get bad press.See omnystudio.com/listener for privacy information.

The Long Road to Making Venezuela's Debt and Oil Investable Again

Venezuela debt holders will likely have to wait years to get their money back after regime change in the oil-rich nation, according to Bloomberg Intelligence. “The near-term challenges are nothing short of massive,” says Damian Sassower, chief emerging-markets credit strategist, in this special episode of the Credit Edge podcast. “I think the rest of this year is spent trying to figure out how to make Venezuela investable,” said Spencer Cutter, who covers US energy producers for BI. They also discuss opportunities and risks for American and Canadian oil companies, the sale of Citgo Petroleum and the “domino effect” on China.See omnystudio.com/listener for privacy information.

Inside ‘the Everything Bubble’ With RBA

Credit is one of many overvalued markets and the technology sector is particularly risky, according to Richard Bernstein Advisors. “We’re kind of in an everything bubble at the moment,” Mike Contopoulos, the firm’s deputy chief investment officer, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Robert Schiffman in the latest Credit Edge podcast. “Tech is going to come back down to earth a little bit this year,” said Contopoulos. RBA, which invests across asset classes via exchange-traded funds, has no exposure to corporate credit. They also discuss value in collateralized loan obligations, mortgage-backed securities and Europe.See omnystudio.com/listener for privacy information.

Newfleet Warns of ‘No Free Lunch’ in AI Debt Funding Frenzy

Long-term debt bets on technology companies that are borrowing heavily for AI may end in tears, according to Newfleet Asset Management. “It’s one of the biggest risks out there,” said Dave Albrycht, the multi-sector fixed income manager’s president and chief investment officer. “There’s no free lunch in the bond market,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Arnold Kakuda in this episode of the Credit Edge podcast. Besides investment-grade companies borrowing to fund equity-like risk, they discuss the risk of Oracle falling to junk, why asset-backed securities are a hedge and how leveraged loans will be worth buying when the Federal Reserve stops cutting rates.See omnystudio.com/listener for privacy information.

KKR Is Hunting for Yield in European and Japanese Credit Markets

KKR is looking to Europe and Japan for yield as US debt spreads grind tighter. “Investors are very focused on relative value in a market where there’s not a lot,” Tal Reback, global investment strategist for the firm’s credit and markets business, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in this episode of the Credit Edge podcast. “In general, investors are much more intrigued about how to diversify geographically,” she adds. They also discuss what KKR thinks could be a $1 trillion European asset-backed debt opportunity, private credit default risk, valuations of direct loans, sector bets and business development companies.See omnystudio.com/listener for privacy information.