The Credit Edge by Bloomberg Intelligence Bourbon and Bonds: The Credit Edge 2025 Outlook
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Dec 17, 2024 Joining the discussion are Oleg Melentyev, head of high-yield credit strategy at Bank of America, and Matt Mish, head of credit strategy at UBS. They delve into credit spreads nearing record lows and the implications of rising debt issuance. Key topics include the impact of tariffs on credit markets and navigating risks amidst economic uncertainties. They also explore the evolving loan landscape and the critical role of liability management in preventing defaults. Bourbon culture uniquely ties into investment strategies, adding flavor to the financial discourse.
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Bourbon and Bonds
- Matt Brill, Invesco's Head of NA IG Credit, purchases a bourbon barrel annually.
- The team creates credit-themed labels, like "Buy Triple B's" and "Curve Flattener", reflecting market trends.
Record Tight Spreads
- US investment-grade bond spreads are expected to reach a record tight 55 basis points.
- This is driven by high yields, strong balance sheets, and increased market liquidity from portfolio trading.
Utility Hybrids Opportunity
- Consider utility hybrids as an investment opportunity.
- Driven by AI-fueled power demand, these offer 6.5-7% yields with investment-grade ratings.