The Credit Edge by Bloomberg Intelligence BlackRock Says CLOs Are Among Best Relative Value Picks in Credit
26 snips
Sep 25, 2025 James Turner, co-head of European Fundamental Fixed Income at BlackRock, shares insights from his extensive background in leveraged finance and CLO strategies. He emphasizes that collateralized loan obligations present one of the best relative value picks in the credit markets. The discussion explores sector opportunities in autos, healthcare, and chemicals, along with the outlook for defaults and recoveries in leveraged finance. Turner also highlights the importance of nimble credit strategies and the impact of rising defense spending on market dynamics.
AI Snips
Chapters
Transcript
Episode notes
Focus On Fundamentals Over Headlines
- Markets are looking through headline noise because investors focus on fundamental corporate credit and income demand.
- Strong technicals and refinancing access support tighter spreads despite macro and political risks.
Be Selective In Auto Exposure
- Carefully select credits in stressed sectors like autos and prioritize higher-quality, premium firms that can pass through price increases.
- Avoid commoditized names that face tariff and EV import pressures unless credit fundamentals are strong.
European Chemicals Face Structural Cost Disadvantage
- European chemicals face unusually tight margins due to high feedstock and gas costs versus global peers.
- Only low-cost or highly specialised producers will remain internationally competitive.