Homeowners cashing out after a surge in real estate prices presents a major opportunity for debt investors, according to TPG Angelo Gordon. “We’re seeing the evolution of home equity products,” said TJ Durkin, the firm’s head of structured credit and specialty finance. “There could be $150 to $200 billion of origination per year, with a $2 trillion really addressable market there,” Durkin tells Bloomberg News’ James Crombie and Carmen Arroyo, and Bloomberg Intelligence senior credit analyst David Havens in the latest Credit Edge podcast. Durkin and Havens also discuss private debt, asset-based finance, commercial real estate, M&A and residential solar energy.

See omnystudio.com/listener for privacy information.

Private credit to risky borrowers that need a lifeline is poised to boom as rates stay high, according to Oaktree Capital Management. “You’re going to see a lot of what they call rescue financing,” said David Rosenberg, head of liquid performing credit at Oaktree. “That’s going to be one of the greatest opportunities we’ve seen in a decade.” Loans to troubled companies will focus on sectors that have seen most leveraged buyout activity, like technology and health care, Rosenberg tells Bloomberg News’ James Crombie and Bloomberg Intelligence senior credit analyst Jean-Yves Coupin in the latest Credit Edge podcast. Rosenberg and Coupin also discuss liability management, creditor-on-creditor violence, private debt stress, the M&A outlook, European investment opportunities and geopolitical risks.

See omnystudio.com/listener for privacy information.

Sustainable finance can keep growing despite potential headwinds from the next US administration, according to Nikko Asset Management. “If the political side is not asking for disclosure on strategies and updates on ESG, we as portfolio managers have to ask,” said Holger Mertens, Nikko’s head of global credit, referring to environmental, social and governance standards. “It’s our job to make sure we’re buying assets at the right price,” Mertens tells Bloomberg News’ James Crombie and Bloomberg Intelligence senior credit analyst Tolu Alamutu in the latest Credit Edge podcast. Mertens and Alamutu also discuss ESG debt returns, energy transition, issuance forecasts and real estate risks such as stranded assets.

See omnystudio.com/listener for privacy information.

The US economy heading for a potentially “turbulent landing” may spell trouble for junk bonds, according to Colleen Cunniffe, head of global taxable credit research at Vanguard. “We’re actually relatively cautious on high yield at the moment from a broad perspective,” Cunniffe tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Himanshu Bakshi in the latest Credit Edge podcast. The world’s second-largest asset manager prefers debt rated BBB, bonds from utilities and banks, as well as asset-backed securities in the auto sector. Cunniffe and Bakshi also discuss commercial mortgage-backed securities, the impact of consumer stress on bank asset quality and emerging markets.

See omnystudio.com/listener for privacy information.

Lending directly to middle-market US-based companies is the best opportunity in credit markets, offering double-digit yields, according to Randy Schwimmer, vice chairman at Churchill Asset Management. “We probably only have a small handful of lenders that we’re competing against,” Schwimmer tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Mike Holland in the latest Credit Edge podcast. “This right now is undiscovered value that is hiding in plain sight,” added Schwimmer, whose firm specializes in mid-market debt deals. Schwimmer and Holland also discuss loan margin and covenant trends, fundraising, private credit innovation, the impact of higher-for-longer rates and regulation.

See omnystudio.com/listener for privacy information.

Reports of active management's demise have been greatly exaggerated. Active continues to grow and evolve in ETFs while mutual funds prosper and define benefit plans. Bloomberg Intelligence strategy team uncover active opportunities and glean insights from active managers and those who cover the industry. Listen to Inside Active by Bloomberg Intelligence.

See omnystudio.com/listener for privacy information.

High-grade US corporate bond issuance will rise again in 2025, building on this year’s record-setting pace, according to Goldman Sachs. “There’s a lot of growth in the economy that needs to take place, as well as all of the refi,” Jonny Fine, Goldman’s global head of investment grade debt tells Bloomberg News’ James Crombie and and Bloomberg Intelligence’s Arnold Kakuda in the latest Credit Edge podcast. Refinancing will account for the bulk of the sales, while infrastructure finance and buyouts will boost volume as the economy expands. Fine and Kakuda also discuss the rise of private credit, how regulation and Basel endgame will affect bond markets and the differences between bank financing in the US and Europe, including Additional Tier 1 bonds.

See omnystudio.com/listener for privacy information.

Private debt doesn’t offer high enough returns to justify the growing risks, according to Pimco. “Fundamentals are deteriorating in more levered portions of the credit markets,” said Mohit Mittal, chief investment officer for core strategies at Pimco. “You’re seeing more complacency, so you have to be very thoughtful, you have to be very careful.” Investment-grade direct lending pays only half the premium needed to compensate for worse liquidity than in public markets and rising fundamental concerns, Mittal tells Bloomberg News’ James Crombie and Irene Garcia Perez and Bloomberg Intelligence’s Stephen Flynn in the latest Credit Edge podcast. Mittal and Flynn also discuss the outlook for the telecoms and the cable media sector, including consolidation and deleveraging.

See omnystudio.com/listener for privacy information.