The Credit Edge by Bloomberg Intelligence BlackRock Sees Credit Pain as Tariff Confusion Reigns
15 snips
Apr 24, 2025 AI Snips
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Episode notes
Improved High Yield Credit Quality
- High yield credit quality has improved significantly over 15-20 years, with more double Bs and fewer triple Cs today.
- This higher starting quality offers more cushion against economic volatility and potential downturns.
Bifurcated High Yield Market Spreads
- The high yield market is bifurcated; some bonds yield over 12% while others are more stable.
- Current spreads are about 175 basis points wider, but there's room for more widening as fundamentals deteriorate.
Build Portfolio in Stable Sectors
- Focus on higher quality credit segments in volatile markets; allocate 25-30% of capital there.
- Use volatility to add to positions in stable sectors with recurring revenue.