FICC Focus

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.

Mark Paris, Chief Investment Officer and Head of Municipals at Invesco, brings over 20 years of expertise in municipal bonds. He discusses the bright outlook for municipal bonds amidst softening tax cut expectations and attractive yields. The conversation touches on resilience in the face of natural disasters, the relationship between property values and credit downgrades, and implications of a new administration on municipal finance. Paris emphasizes the importance of thorough research and keeping an eye on inflation trends to seize investment opportunities.

The two standout risks with the new US administration are tariffs and immigration policy, Kathy Jones, chief fixed-income strategist at Charles Schwab, says in the latest episode of Bloomberg Intelligence’s Macro Matters podcast. Jones is joined by host and BI chief US rates strategist Ira Jersey to discuss the outlook for Treasury markets and the economy. The pair discuss the recent drivers of yields across the curve, as well as inflation and potential fiscal risks to growth as the new administration enters office. They also hit on government debt and deficits, and how these influence bond market valuations.The Macro Matters podcast is part of BI’s FICC Focus series. 

Desmond English, Head of European Leveraged Loans at Amundi, shares his expertise on the evolving landscape of leveraged loans and CLOs. He discusses the contrasting performance of U.S. and European markets, emphasizing trends in loan pricing and default rates. The conversation reveals the significant role CLOs play in driving loan supply and tackles the impact of monetary policy on market dynamics. English also addresses liquidity challenges and the future outlook for loans, highlighting expected growth and investment opportunities heading into 2025.

High-beta asset classes will likely swing on US-centric narratives, but the country’s financial conditions remain supportive despite a less dovish Federal Reserve. Max Kettner, Chief Multi-Asset Strategist at HSBC, joins Bloomberg Intelligence Chief Emerging Markets Credit Strategist Damian Sassower to discuss his investment outlook for 2025, with US equities, high-yield debt and emerging-market credit standing out. Kettner and Sassower touch on trade policy under President-elect Donald Trump, the fiscal challenges facing China, historically tight credit spreads and the continued pursuit of incremental carry.The EM Lens podcast is part of BI’s FICC Focus series. 

“There is one AAA bond that has taken a loss so far in CMBS. There will be plenty more.” Waterfall Asset Management’s Head of ABS Strategy Keerthi Raghavan didn’t mince words in laying out his view of the office real estate market, one of the few corners of the credit universe offering significant distressed opportunities. Raghavan, speaking with Bloomberg Intelligence’s Noel Hebert and Phil Brendel, examined the widely different segments of the commercial real estate market, his data-centric approach to investing and strategies employed amid distressed situations (5:50). Prior to that, Hebert and Brendel highlighted the risks investors take when the market speculation is high, evidenced by historically tight spreads and a dearth of distressed debt. The podcast concludes with BI’s Negisa Balluku joining the two analysts for a round table discussion covering Ligado Networks, Serta Simmons, Party City, Hertz, Incora, and CommScope(1:25:40).Key interview take aways and time stamps: Approach to active portfolio management: Thematic vs. idiosyncratic (00:18:30) Assessing building quality and valuation of an asset (00:34:00) Trading, sourcing and liquidity of CRE credit risk (00:46:40) CRE investor base and price discovery: Valuations of RE vs. CRE debt (00:55:00) Workout process dynamics and misalignment between counterparties (01:08:45) Market outlook and risks over the coming 12-24 months (01:20:30)

Incoming pro-growth policy, while inflationary in nature, could result in a strong credit environment in the eyes of PineBridge Investments’ Global Head of Credit, Steven Oh. Oh joins Bloomberg Intelligence corporate credit strategists Noel Hebert and Sam Geier on this episode of Credit Crunch to walk through various macroeconomic pathways. The conversation touches on central-bank policy expectations and the geopolitical climate, before diving into portfolio composition, sector exposures and the current default landscape.

The path of least resistance continues to be cyclically driven dollar-bullish and euro-dollar-bearish views into early 2025, but that’s a narrative that’s priced in, extended and crowded. Host Audrey Childe-Freeman, Bloomberg Intelligence’s chief G-10 FX strategist, talks to Constantin Bolz, head of G10 FX for UBS’ Chief Investment Office, about what could trigger a turnaround in the euro-dollar fortunes in 2025, with several “known unknown” potential game changers when it comes to how much dollar upside is likely. The two also touch on non-dollar, strong G10 currency convictions, with Bolz favoring the Aussie, the yen and sterling in diversification strategies.

Henry Song, a portfolio manager at Diamond Hill Capital Management specializing in short duration securitized bond strategies, shares insights on the fixed income landscape. He discusses the advantages of shorter-dated bonds amid high interest rates and inflation challenges. The conversation dives into the intricacies of securitized markets versus corporate bonds, highlighting opportunities in asset-backed securities. Additionally, Song touches on the evolving role of technology in trading and the strategic importance of diverse portfolio construction in today's volatile market.

A resilient macroeconomic environment, along with rising M&A activity, have the direct-lending space primed for additional growth in the coming years. Curt Lueker, managing director and head of direct lending at Marathon Asset Management, joins Noel Hebert and Sam Geier of Bloomberg Intelligence on this episode of Credit Crunch to discuss how the firm is capitalizing on its expertise in the core middle-market sector. The conversation dives into the firm’s recent partnership with Webster Bank, the investment committee process, secondary markets, central bank policy and much more.