The Credit Edge by Bloomberg Intelligence

Office landlords are falling behind on debt payments at the fastest rate in five years as tenants flee, says Scott Carpenter, who covers structured finance for Bloomberg News. Working from home slashed demand for office space, just as surging interest rates boost costs, spelling trouble for lenders. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also examines the impact of US culture wars on consumer companies with Bloomberg Intelligence analyst Louise Parker. Anheuser-Busch InBev’s recent collaboration with a transgender influencer slammed Bud Light sales, whacked its stock and may also dent the company’s bonds.See omnystudio.com/listener for privacy information.

More companies are going bust not long after securing cash that was supposed to save them, highlighting growing stress as rates rise and the economy slows, says Amelia Pollard, who covers distressed debt for Bloomberg News. More of these so-called liability management deals are expected to fail, making bankruptcies messier and more complex. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also quizzes Bloomberg Intelligence analyst Mike Campellone on the retail outlook, with consumers under pressure. Department stores like Macy’s and Target are poised to do better, while Under Armour is seen as a laggard.See omnystudio.com/listener for privacy information.

New accounting rules have exposed $64 billion in debt held by the largest US businesses, according to Lucca de Paoli, who covers distressed debt for Bloomberg News. This so-called supplier finance can be a safe way to manage cash flow — but it’s also been at the heart of some major corporate collapses, and could fuel ratings downgrades. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Bloomberg Intelligence analyst Sharon Chen about the outlook for SoftBank Group Corp. after it was cut deeper into junk. Elsewhere in Japan, Chen examines the refinancing risk at Rakuten Group Inc., which has $5 billion in bonds coming due.See omnystudio.com/listener for privacy information.

Private credit is having a coming-of-age moment, luring investors with double-digit returns and jumbo-sized deals, according to Silas Brown, who covers private credit for Bloomberg News. The $1.5 trillion market isn’t without risk, as borrowers grapple with surging costs and slowing earnings, while investors face liquidity and transparency challenges. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Bloomberg Intelligence credit analyst Rena Kwok about the outlook for Asian banks following heightened volatility in the sector. South Korean financial institutions are a weak link amid macroeconomic headwinds and exposure to mortgages.See omnystudio.com/listener for privacy information.

 Companies are going bankrupt at the fastest pace since 2009 and there’s no end in sight as rates rise and the economy sputters, according to Jeremy Hill, who covers distressed debt for Bloomberg News. Lenders are no longer providing fresh liquidity to zombie firms across sectors -- from retail to commercial real estate -- leaving them to perish. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Bloomberg Intelligence credit analyst Jaimin Patel about the outlook for US utilities, a refuge from heightened economic and financial stress. Patel weighs the risks -- including access to capital markets and the impact of higher rates -- as well as the ESG opportunities for investors. See omnystudio.com/listener for privacy information.

Investors in troubled company debt are excited about the opportunities in banks, retail and health care as rates grind higher and the economy sputters, with one fund making $30 million on a single distressed debt trade. Consumers have been resilient but cracks are spreading, while a shift to electric vehicles adds stress in autos, according to Erin Hudson, who covers distressed debt for Bloomberg News. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Bloomberg Intelligence analyst Paul Vickars about European energy and utilities. High oil prices have created a windfall and the region is less exposed to volatility from Russia, Vickars says. The UK’s SSE is one to watch as companies sell more green, sustainability and transition bonds.See omnystudio.com/listener for privacy information.

Credit markets are cracking up as liquidity evaporates, according to Jill Shah, who covers leveraged finance for Bloomberg News in New York. Small businesses are struggling to borrow, distressed debt has surged, defaults are ticking up, banks have tightened lending standards and bankruptcies are on the rise, particularly in construction and retail. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie asks whether this is all bad for the US economy. Bloomberg Intelligence credit analyst Robert Schiffman, meanwhile, says he’s never been more bullish about the technology sector, despite all the fundamental headwinds. First-quarter earnings are showing signs of a turnaround, the biggest companies are generating a lot of excess cash and the outlook for investors is bright, Schiffman says.See omnystudio.com/listener for privacy information.

Distressed companies are moving assets out of lenders’ reach to raise new funds and buy time as higher interest rates and a slower economy bite. These controversial debt moves — known as drop-downs — are fueling a rash of creditor lawsuits, according to Reshmi Basu, who covers distressed debt for Bloomberg News. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Bloomberg Intelligence analyst Himanshu Bakshi about winners and losers in the financial sector. A steep decline in First Republic’s stock revives concerns about the health of banks, but most are in good shape and credit-card issuers are well-placed to ride out a US recession, Bakshi says.See omnystudio.com/listener for privacy information.

The restructuring of China Evergrande’s massive debt pile has been one of the riskiest bets in all of distressed investing. Redwood and Saba are among funds that recently endorsed a plan hammered out by the property-development giant and global creditors, according to Rachel Butt, a reporter at Bloomberg News in New York. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Bloomberg Intelligence analyst Matthew Geudtner about junk borrowers heading for investment grade despite macroeconomic headwinds. Companies in the travel and leisure sector are doing particularly well amid “revenge spending” by US consumers with pent-up demand after years of Covid-19 restrictions. Howmet Aerospace, an aircraft material supplier, is one to watch, Geudtner says. See omnystudio.com/listener for privacy information.

The takeover by creditors of German retailer Takko Fashion, with a solid operating performance, highlights the rising risk for junk-rated issuers facing a mountain of debt coming due. Some will require drastic solutions as funding costs jump and the economy slows, according to Giulia Morpurgo, a reporter at Bloomberg News in London. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Hong Kong-based Bloomberg Intelligence analyst Pri de Silva about opportunity in the financial sector following the recent collapse of banks in the US and Europe. Additional Tier 1 securities are poised for a comeback — with imminent issuance in Asia — and they’re too good for investors to miss given relatively high yields, says de Silva.See omnystudio.com/listener for privacy information.