The Credit Edge by Bloomberg Intelligence

Michael Zawadzki, Chief Investment Officer of Blackstone Credit & Insurance, shares insights on the allure of private credit, highlighting its 150-200 basis points premium over traditional debt markets. He explains why speed and value are attracting borrowers to direct lenders and the growing interest from insurers in long-duration private investments. The conversation also touches on the potential in data center financing, the competitive landscape of managers, and the anticipated rise in mergers and acquisitions as the market evolves.

In this engaging discussion, Scott Greenberg, the Global Chair of Business Restructuring at Gibson Dunn, shares insights on the burgeoning distress debt market in Europe. He highlights how legal strategies used in the US are being adapted for European clients amidst rising financial challenges, particularly in France. Greenberg explores the complexities of navigating credit markets and the differences in restructuring practices between Europe and the US. Listeners will gain a deeper understanding of how strategic legal advice is essential in these turbulent times.

Join Tom Moulds, Senior Portfolio Manager at RBC BlueBay, as he discusses why public credit trumps private debt. With over a decade managing European corporate strategies, Moulds emphasizes the advantages of liquidity and visibility in public markets. He also touches on the rise of financial stress in real estate and the interplay between defense spending and sustainable investing. With lurking macro risks, Moulds offers insights on navigating today’s turbulent credit landscape and the potential pitfalls of private debt investments.

Christina Padgett, Associate Managing Director at Moody's and credit market expert, discusses the anticipated resurgence of leveraged buyouts (LBOs), particularly in tech and healthcare. She highlights the need for market adjustments due to capital overflow and explores the risks facing lower-rated companies in the current environment of rising interest rates. Tune in to hear about distressed debt exchanges, the forecast for decreasing default rates, and the evolving dynamics of private and public credit markets, all packed with insightful analysis!

Dagmara Michalczuk, co-chief investment officer at Tetragon Credit Partners, specializes in the high-risk CLO market. She discusses expectations for collateralized loan obligation equity to yield up to 15% this year, emphasizing the benefits of diversification and leveraging financial engineering. Dagmara highlights risks related to loan defaults and liability-management exercises, as well as the shifting investment dynamics between U.S. and European CLOs. Her insights underscore the growing interest in this asset class amidst economic uncertainties.

In this discussion, Jason Mudrick, the Chief Investment Officer and founder of Mudrick Capital Management, shares his insights on the anticipated rise in debt defaults over the next seven years due to high funding costs. He highlights that the normalization of interest rates, rather than economic downturns, is driving this trend. Mudrick also dives into notable debt restructurings involving Tropicana and Yellow Pages and discusses emerging investment opportunities in innovative sectors like flying taxis.

Sabrina Fox, founder of Fox Legal Training and former head of the European Leverage Finance Association, shares her insights on rising debt documentation risks in a cash-chasing market. She highlights how current provisions often create a misleading reality, akin to 'La La Land.' The discussion dives into the lack of transparency in high-yield debt, key lessons from the Altice restructuring, and the aggressive spread of liability management from the US to Europe. Fox emphasizes the need for training in legal analysis to better navigate these complexities.

Aaron Kless, CEO and CIO at Andalusian Credit Partners, specializes in sports, media, and entertainment investment. He reveals that U.S. billionaires are just beginning their global sports invasion, with significant interest from sovereign wealth funds. Kless discusses the implications of high-profile sports deals and the financial dynamics of being a fan. The conversation also delves into growth opportunities in stadium financing and how emerging technologies are reshaping investments in both professional and amateur sports.

Mike Dennis, co-head of European credit at Ares Management, discusses how private lenders are increasingly eyeing funding opportunities in Europe’s defense sector, amid rising geopolitical tensions. He emphasizes the need to align investments with limited partners' ESG concerns while exploring trends in the European middle market and potential expansions into Italy. Dennis highlights the resilience of private credit amidst economic uncertainty and the strategic move towards selective lending, showcasing the evolving landscape of private equity.

Oksana Aronov, Head of Market Strategy for Alternative Fixed Income at J.P. Morgan Asset Management, shares her insights on navigating the turbulent credit markets. She highlights the growing struggles of junk bond firms and the complacency surrounding credit risks. Aronov emphasizes the need for hedges against potential losses and warns about companies increasing debt instead of repaying it. The discussion also covers the importance of cautious investment in these uncertain times and the implications for both high-grade and high-yield debt.