FICC Focus

Tarek Abou Zeid, a partner and portfolio manager at Man AHL, brings his expertise in catastrophe bonds to the discussion. He dives into the fascinating world of cat bonds, exploring their rise following natural disasters and their role in diversifying investment portfolios. Real-world examples, from Hurricanes Andrew to the FIFA World Cup’s insurance strategies, highlight their innovative use in risk management. The conversation also touches on the dynamic between primary and secondary markets, as well as the promise of advanced technology in bond analysis.

Tim Coffin, Director of Sustainability at Breckinridge Capital Advisors, shares his insights on the burgeoning municipal bond market and the rising demand for sustainable investing. He discusses the shift toward separately managed accounts and how technology enhances investment strategies. The conversation also covers the influence of ESG factors on bond portfolios and the challenges faced by underserved communities. With changing federal policies, Coffin emphasizes the critical relationship between retail investors and the muni market in fostering sustainable growth.

Brij Khurana, a Portfolio Manager at Wellington Management, dives into the intricacies of fixed-income markets and Federal Reserve policies. He discusses the potential for unexpected interest rate cuts if economic conditions shift, alongside insights on inflation trends shaping market expectations. The dialogue expands to the domestic labor market and evolving fiscal policies under the new administration. Khurana also touches on the impact of real rates on investment strategies and highlights the changing dynamics in corporate bond trading.

Bill Derrough, Managing Director at Moelis & Company, draws from his 35 years on Wall Street to share insights on today’s vibrant rescue-financing landscape. He recounts pivotal moments from the Hertz bankruptcy auction and American Airlines’ Chapter 11 exit. The discussion delves into emerging trends in liability management, the role of cooperation agreements, and creative restructuring strategies. Derrough also addresses sector-specific challenges in distressed debt and highlights significant case studies, underscoring the collaborative nature of modern finance.

Marco Salkovaci, a Senior High Yield Fund Manager at Union Investments, dives deep into the high yield market trends, revealing that default rates in Europe are at a low 2.5% and just 1.1% in the US. He discusses mixed investor sentiment for 2024, influenced by economic uncertainties and interest rates. They explore the evolving landscape of corporate bond supply, highlighting a preference for high-yield assets. The conversation also touches on liquidity strategies and the potential impacts of Germany's upcoming elections on investment trends.

The pound may be getting a bounce from the optimism that the UK could dodge President Donald Trump’s tariffs as trade headlines roil global markets, but not all is rosy for the British currency on the domestic cyclical front. In this episode of FX Moment, Bloomberg Intelligence’s chief G-10 FX strategist Audrey Childe-Freeman and Jordan Rochester, head of FICC strategy for EMEA at Mizuho Bank, discuss the pound’s position vs. peers on the tariff narrative front, UK’s near-term economic prospects and the Bank of England monetary policy outlook ahead of the Feb. 6 meeting. They also look beyond the positive dollar narrative to identify strong G-10 FX views for 1Q, with the bullish cyclical and structural yen case in the limelight at a time when defensive currency positioning makes sense.

Markets may be having to assess more than the normal number of cross currents in the economy right now, with a new US administration, stock volatility and a host of geopolitical developments. On this episode of the Bloomberg Intelligence Macro Matters podcast, host and BI chief US rates strategist Ira Jersey is joined by Frank Rose, president of Chevalier Strategic Advisors, to discuss the primary geopolitical risks the US faces in coming years. They also review key appointees from the Trump administration and their potential influence on international policy, while exploring the threats stemming from Eurasia, with a focus on Russia-China relations. Jersey is also joined by BI’s Chief European rates strategist Huw Worthington and senior rates strategy associate Will Hoffman. They examine the results of the recent Bank of Canada, Federal Reserve and European Central Bank meetings, and what those may mean for the path of monetary and yield curves.

Hamza Lemssouguer, Founder and CIO of Arini Capital Management, shares his insights on the evolving European credit market. He discusses how low-interest-rate debt is maturing and traditional financing is retreating, creating opportunities in high yield credit. Lemssouguer elaborates on the balance between long and short investment strategies and the intricacies of managing risks. He also highlights his strategies in Collateralized Loan Obligations and the importance of thorough credit selection amidst changing market dynamics. Plus, a peek into his childhood passion for bird conservation adds a personal touch.

It may be a good year for the volatility market as pro-business government policies and elevated equity exposure that drive market overshoots could see high reactivity on the downside. In this edition of the All Options Considered podcast, BI’s Chief Global Derivatives Strategist Tanvir Sandhu gives an update on market volatility and is joined by Catherine Clay, Global Head of Derivatives at Cboe. They discuss cross-asset volatility, flows and crypto options market.

As others head for the exit from the commercial real estate (CRE) sector, Benefit Street Partners President Richard Byrne views this as the perfect time to fill the funding void that could arise. Byrne joins hosts Noel Hebert and Sam Geier of Bloomberg Intelligence on Credit Crunch to discuss the budding opportunity in CRE as a result of higher interest rates. The discussion gets into CRE debt vs equity, an impending CRE maturity wall, the multifamily sweet spot, relative value within direct lending and much more. Credit Crunch is part of the FICC Focus podcast.