The Credit Edge by Bloomberg Intelligence

Lending to law firms against portfolios of legal assets can generate hefty returns, according to North Wall Capital, the London-based credit investor. “We target 25%-plus IRRs, and we have historically outperformed that,” Fabian Chrobog, its chief investment officer and founder, says in Bloomberg Intelligence’s Credit Edge podcast. Separately, North Wall aims to make “mid teens” gains in middle-market private credit, Chrobog tells Bloomberg News’ James Crombie and BI senior credit analyst Tolu Alamutu. Also in this episode, Chrobog and Alamutu discuss creditor protections, real estate opportunity and the advantages of geographical diversification. “I can see the returns in the US decreasing while I can see still some really interesting opportunities in Europe,” says Chrobog. See omnystudio.com/listener for privacy information.

AllianceBernstein sees opportunity in European and emerging market credit markets and is steering clear of energy sector debt. “High-quality European high yield, on a dollar-hedged basis, is attractive,” Will Smith, director of U.S. high-yield credit at AllianceBernstein, says in the latest Credit Edge podcast from Bloomberg Intelligence. In EM corporate bonds, “you’re getting paid a lot more risk premium there — a lot more in spreads than you are in developed market credit markets,” Smith tells Bloomberg News’ James Crombie and Bloomberg Intelligence senior credit analyst Spencer Cutter. Smith and Cutter also discuss relative value and risks in oil and gas company debt. “Your antenna goes off when energy companies start returning capital to shareholders,” says Smith. See omnystudio.com/listener for privacy information.

In this engaging discussion, senior analysts Stephen Flynn and Aidan Cheslin from Bloomberg Intelligence join contributor James Crombie. They explore the potential for debt tightening among cruise line giants like Carnival and Royal Caribbean, along with insights on automotive companies like Rolls-Royce and Ford. The trio highlights the credit challenges facing Disney and geopolitical risks affecting credit confidence. With a keen eye on macroeconomic trends, they dissect how fragile valuations could lead to rapid market shifts.

Alan McKnight, CIO at Regions Bank, discusses rising default risks for small-cap US companies, especially non-earners, facing debt refinancing challenges. Stress on low-income consumer companies is noted. Opportunities in industrial and defense sectors are explored, with a focus on major borrowers like Honeywell and Lockheed Martin.

Tim Lyne, CEO of Antares Capital, discusses the firm's expansion plans in Europe and interest in real estate and infrastructure. He touches on funding strategy, market stress, fundraising, and the increasing diversity of private credit investors. The podcast explores the risks and growth of the private credit market, strategies for minimizing risks, expansion into European markets, geographical diversification in fundraising, and worries about financial outlook.

Bloomberg Intelligence analysts Arnold Kakuda & Jeroen Julius discuss banks' risks from political strife & real estate troubles. They dive into challenges faced by smaller US banks, European institutions, unrealized losses, and opportunities in preferred debt. The podcast explores strategies for maximizing returns, regulatory obstacles, and the implications of current market dynamics.

Wayne Dahl, co-portfolio manager at Oaktree, discusses private credit stress and excitement in the market. Topics include risks in health care, opportunities in consumer staples, insurance, and securitized credit. Dahl highlights potential spread compression due to excess demand.

Oded Manor from BlackRock discusses the appeal of the despised CMBS market and the attractive credit opportunity it presents. He also talks about liquidity risks, comparing bonds and loans, and the impact of the upcoming French election on European credit markets.

Up to a quarter of Europe’s high-yield borrowers can’t afford to pay the current high interest rates to refinance debt that’s coming due, according to alternative asset manager Arini. “The market has been very active in refinancing these companies but we still have a lot to do,” says Hamza Lemssouguer, founder and chief investment officer of Arini, in the latest Credit Edge podcast from Bloomberg Intelligence. For as much as 25% of the market, “it’s just impossible to afford the current interest rates,” Lemssouguer tells Bloomberg News’ James Crombie and Giulia Morpurgo, and Bloomberg Intelligence Senior Credit Analyst Tolu Alamutu. Also in this episode, Lemssouguer and Alamutu discuss challenges in the commercial and residential real estate sector. And Lemssouguer talks about how to invest in debt collectors. See omnystudio.com/listener for privacy information.

European private debt firm Arcmont Asset Management's co-CIO, Mattis Poetter, discusses the sustainability of double-digit returns in private credit despite dropping interest rates. Topics include defaults, pay-in-kind structures, debt-for-equity swaps, market dislocations, and opportunities in net-asset-value financing.