The Credit Edge by Bloomberg Intelligence

PineBridge Fears Credit Calamity as Demand Balloons

Dec 12, 2024

In this discussion, Jeremy Burton, a Portfolio Manager at PineBridge Investments, shares insights on the current credit market landscape. He highlights the troubling imbalance between soaring demand and limited supply of corporate bonds, raising concerns about subpar credit decisions. They delve into rising interest rates, consumer default rates, and risks in specific sectors like media and healthcare. Burton also emphasizes the need for prudent risk management as the market navigates these economic uncertainties. It's a compelling look at the complexities shaping today's credit environment.

49:45

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Episode guests

Jeremy Burton

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Episode notes

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Quick takeaways

PineBridge Investments warns that an imbalance between soaring demand and limited supply in corporate bonds risks poor credit decisions.

The podcast highlights a dual climate of optimism in credit markets amidst rising borrowing and concerns about inflation and geopolitical tensions.

Specific sectors like healthcare and software face unique challenges, emphasizing the need for careful credit selection amid rising interest rates.

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Intro

6min

Navigating Market Imbalances: The Impact of Rising Interest Rates

6min

Exploring Credit Spreads and Market Implications

2min

Navigating Mispriced Risks and Corporate Behavior

11min

Navigating the Credit Market Landscape

24min

Contrarian Insights on Market Dynamics for 2025

2min

Swelling demand for limited supply of corporate bonds and loans could spell trouble for credit markets, according to PineBridge Investments. “The thing that gives me a lot of pause right now — and some concern — is the lack of net new supply versus the amount of demand out there,” said Jeremy Burton, the firm’s portfolio manager for US high yield and leveraged loans. “That leads to the risk that the market as a whole will make subpar credit decisions,” he tells Bloomberg News’ James Crombie and Bloomberg Intelligence senior credit analyst Jody Lurie, in the latest Credit Edge podcast. Burton and Lurie also discuss the state of the consumer, default rates, coercive liability management, as well as risks in the media, health care and software sectors.

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