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Speaker 1: Hello, Welcome to the Credit Edge, a weekly markets podcast.

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Speaker 1: My name is James Crumby. I'm a senior at his

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Speaker 1: twit Bloomberg and.

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Speaker 2: On Mike Camplone, a senior credit analyst covering high yield

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Speaker 2: and investment grade retailers at Bloomberg Intelligence. This week, we're

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Speaker 2: very pleased to welcome Brad Rogueff, Global head of Research

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Speaker 2: at Barclay's. How are you, Brad?

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Speaker 3: I'm doing great. Thank you guys both for having me.

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Speaker 3: Hope you had a nice Thanksgiving.

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Speaker 2: Absolutely likewise as well for those of you who don't

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Speaker 2: know Brad. Since joining Barclays in two thousand and eight,

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Speaker 2: he's held a number of leadership roles across research before

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Speaker 2: assuming his current position in twenty twenty four, including Head

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Speaker 2: of FIC Research, Head of Credit Research, and Head of

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Speaker 2: Credit Strategy. In addition to his leadership role, Brad focuses

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Speaker 2: his research on the US high yield leverd loans, COLO

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Speaker 2: and private credit markets. James, why don't I hand it

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Speaker 2: over to you? Kick us off?

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Speaker 1: Yeah, So, credit markets have had a pretty good year,

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Speaker 1: although risk takers haven't really been rewarded. The twenty to

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Speaker 1: twenty five winners globally held investment grade bonds, and if

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Speaker 1: you stuck your neck out and bought the junkiest junk bonds,

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Speaker 1: the triple c's, you got slammed by tariffs and pulled

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Speaker 1: down by some high profile defaults and bankruptcies. Insatiable demand

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Speaker 1: for yield and limited net new supply of corporate debt

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Speaker 1: are keeping spreads very tight across the board. But there's

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Speaker 1: a ton of AI funding to be done and maybe

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Speaker 1: more M and A that could tip that balance. Looking ahead,

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Speaker 1: the macro outlook seems just as murky as it did

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Speaker 1: twelve months ago. We'll probably get more rate cuts, but

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Speaker 1: inflation is still a problem. US government policy is a

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Speaker 1: huge wildcard, particularly as we get closer to the midterm elections.

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Speaker 1: So we have trade wars, immigration reform, the Big Beautiful Bill,

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Speaker 1: unreliable macro data, political pressure on the Fed, and widespread

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Speaker 1: geo political risk, all making forecasting a very difficult business.

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Speaker 1: But Brad, you've crunched the numbers, as you always do

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Speaker 1: at this time of year. How are we set up

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Speaker 1: for twenty twenty six?

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Speaker 3: A lot there, and what you just said, I surprise

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Speaker 3: when the whole podcast answering that question, I won't don't worry.

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Speaker 3: I know that wouldn't make for a good one. So

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Speaker 3: look as we look at twenty twenty six, we are

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Speaker 3: coming off a year that obviously had that Liberation Day volatility,

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Speaker 3: but then you look across the rest of the year

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Speaker 3: and the volatility and credit spreads really pretty modest relative

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Speaker 3: to points in time historically. If you look at the

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Speaker 3: investment grade market and go back over the course of

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Speaker 3: the last six months, so that doesn't include Liberation Day, clearly,

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Speaker 3: from today you're looking at max credit spreads that are

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Speaker 3: as low as any period in time really, and so

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Speaker 3: that folves super low. You know, you go back to

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Speaker 3: spreads a year ago, they were a couple basis points

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Speaker 3: away from where they are today, and so then really

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Speaker 3: the question is what causes it to change in terily way.

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Speaker 3: We saw Liberation Day as an example for that in

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Speaker 3: twenty twenty five. In twenty twenty six, we think generically,

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Speaker 3: you have to think of this as late cycle, but

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Speaker 3: still late cycle and part of the cycle, not the

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Speaker 3: end of the cycle, right, because if we were in

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Speaker 3: the end of the cycle, or the end of the

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Speaker 3: cycle was that imminent, then we would be talking about

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Speaker 3: recessions and we'd be talking about a lot wider spreads.

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Speaker 3: We don't think you're quite there, and we don't even

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Speaker 3: think that you'll be quite there in terms of recession,

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Speaker 3: just on the horizon by the end of the year.

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Speaker 3: But that would also lead to materially wider spreads. But

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Speaker 3: we think you know you mentioned the murky growth picture,

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Speaker 3: it's still positive, right and for credit and especially the

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Speaker 3: higher quality stuff that can turn out okay, and so

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Speaker 3: we do expect spreads to be wider. I would say

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Speaker 3: the investment grade side, you're looking at spreads in the

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Speaker 3: probably low nineties is where we think they'll be in

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Speaker 3: twenty twenty six. You look at high yield with the

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Speaker 3: leverage finance market, I think there you're pushing into the

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Speaker 3: three hundreds, maybe somewhere, you know, around the three twenty

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Speaker 3: five contexts. So certainly in the context of actually all

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Speaker 3: of credit market's history, nothing material in terms of wider,

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Speaker 3: but still wider from what we've been used to. Over

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Speaker 3: the last six.

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Speaker 2: Months now, we've seen that certain technological investment cycles can

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Speaker 2: reshape funding dynamics across sectors. How do you think the

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Speaker 2: current AI and data center CAPEX wave is altering the

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Speaker 2: credit market playbook? Both in terms of issuer behavior and

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Speaker 2: how investors should think about sector level evaluation resets.

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Speaker 3: Well, look, as a guy who started my career on

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Speaker 3: the turn of the century covering TMT stuff, I certainly

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Speaker 3: understand what you're asking me there, and I think we

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Speaker 3: really are in the early innings of this playing out

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Speaker 3: in the credit markets right and specifically in the public

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Speaker 3: credit markets. I mean, some of the stats from this

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Speaker 3: year are pretty remarkable because this news story has become

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Speaker 3: so relevant today that you know, it's what we're all

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Speaker 3: focusing on. But if we look at netsupply for the

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Speaker 3: investment grade market this year, we're down close to ten

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Speaker 3: percent in nets supply. Now, no one thinks that's going

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Speaker 3: to be the case next year, including us. We think

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Speaker 3: that number could be up on the order of forty

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Speaker 3: percent next year, led by tech and not just tech,

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Speaker 3: but and M and A supply hasn't been up this

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Speaker 3: year either, and flatish let's call it right and talking

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Speaker 3: about you know, big investment, greate M and A. So

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Speaker 3: you get those two things combined, you can get a

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Speaker 3: big increase in net supply, and you obviously need demand

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Speaker 3: to meet that. Now, specifically, the changes in credit markets

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Speaker 3: that you allude to, right, the changes in credit markets.

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Speaker 3: Let's look at everything, right, and you can't just look

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Speaker 3: at here public markets. You have to look at private

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Speaker 3: markets as well. One thing we've been saying for a

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Speaker 3: long period of time, there's a lot of concerns about

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Speaker 3: systemic risks, and you guys may ask me about this later,

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Speaker 3: so I'm happy to talk about it then too. In

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Speaker 3: private credit markets, what we've said for a while is

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Speaker 3: if there's risks that are going to come from private

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Speaker 3: credit markets, I actually think the greatest likelihood is it

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Speaker 3: comes from the enterprise value on tech companies just you know,

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Speaker 3: our enterprise value multiples excuse me, and tech companies coming down,

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Speaker 3: because if you look across these markets, traditionally in IG,

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Speaker 3: the big tech names, the hyperscalers have been the lowest

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Speaker 3: beta part of the investment grade market, and that's because

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Speaker 3: they barely had any net debt, right, And now we're

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Speaker 3: seeing certain names that do have a little bit more debt,

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Speaker 3: like Oracle, have higher beta. But and then you look

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Speaker 3: in high yield, and the names in high yield in

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Speaker 3: the tech world, they're not necessarily the AI ones are

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Speaker 3: also not necessarily the software ones that have come really

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Speaker 3: under the microscope recently, so it hasn't been a particularly

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Speaker 3: high beta and just becoming more of those part of

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Speaker 3: the high yield market. Then you move to leverage loans

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Speaker 3: and you move to private credit, and these are the

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Speaker 3: biggest sectors in that market. And you know, tech is

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Speaker 3: the biggest sector in both those markets. If you include

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Speaker 3: like business services names, you know, really the private credit market,

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Speaker 3: if you include tech, business services, financial services, and a

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Speaker 3: lot of those have a tech component to it, you're

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Speaker 3: talking about half of the private credit market, right and

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Speaker 3: so well, right now the focus is on AI, the hyperscalletors,

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Speaker 3: et cetera, and really what it's doing for the IG market,

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Speaker 3: where we can also get into what it's doing for

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Speaker 3: the private IG market. I was focusing more on the

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Speaker 3: private high yield leverage loan type market there. I mean,

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Speaker 3: it's it's it's becoming a big part of all of this.

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Speaker 1: But if we back up a bit, I just a

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Speaker 1: lot of numbers in what you've just said, a lot

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Speaker 1: of detail, but in terms of the actual supply, I'm

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Speaker 1: interested in the net supply. You're saying it's down ten

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Speaker 1: percent this year and it's going to be up forty percent. Yes,

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Speaker 1: next year. Well, that'd be the biggest increase we've seen

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Speaker 1: and it must be a long time, right.

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Speaker 3: Yes, yes, it is. It is certainly a very sizable number.

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Speaker 3: Now you're talking about obviously the net number winds up

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Speaker 3: being you know, well less than half, probably about forty

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Speaker 3: percent next year around there of the gross number. Right,

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Speaker 3: So you still you know, you're still not talking about

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Speaker 3: the one and a half one one point six trillion

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Speaker 3: we probably think you can see in terms of gross supply.

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Speaker 3: But yes, you need demand to feed that, right. And

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Speaker 3: if you think about the demand that's been feeding the

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Speaker 3: investment grade market over the last few years, it's come

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Speaker 3: from a bunch of different places. You've seen it from

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Speaker 3: the insurance side, annuities, right, Annuity growth has been a

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Speaker 3: big part of that, and you've seen very good inflows

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Speaker 3: if you look at the kind of retail space right

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Speaker 3: where you're looking at ETF's mutual funds. I mean, one

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Speaker 3: thing that's interesting in that is, okay, can this get

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Speaker 3: a bit cheaper and then can we see a bit

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Speaker 3: of a reallocation towards credit. So while often we might

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Speaker 3: look at investment grade corporate fund flows and just that

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Speaker 3: data that you can get every week. That's actually a

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Speaker 3: smaller fraction of what's investing in investment grade than the

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Speaker 3: contributions that can be made from the larger taxable bond

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Speaker 3: fund category. And AE might think of it as things

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Speaker 3: that follow the Bloomberg are good index, right, And so

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Speaker 3: if we look at that twenty twenty funds that follow

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Speaker 3: that index loaded up on credit. It got very cheap

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Speaker 3: during COVID. Obviously that wound up being a very good trade.

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Speaker 3: And since then there the shaff credit in those portfolios

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Speaker 3: has declined every year until this year it's up marginally.

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Speaker 3: It's not much, but it is up marginally. And so

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Speaker 3: I think a source like that that can be billions

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Speaker 3: and billions of dollars in demand if you take that up. Look,

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Speaker 3: are they probably only taking it up if it gets

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Speaker 3: a bit cheaper. Yes. Where that demand, where where where

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Speaker 3: those funds have gone is really towards the securitized products market.

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Speaker 3: This will be the first year, probably in a while,

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Speaker 3: that you have seen a little bit about performance from mortgages,

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Speaker 3: for example, relative to credit. So maybe that relationship is

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Speaker 3: starting to change. And if credit gets a little bit

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Speaker 3: cheaper because of new issue discounts can change even more but.

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Speaker 1: You're saying a big increase in supply and net supply,

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Speaker 1: but then not really much increase in spread. So the

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Speaker 1: demand must be there to pick up all of this supply,

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Speaker 1: including the AI. Are there any potential kind of you know,

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Speaker 1: worries about that forecast in terms of the demand trailing off.

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Speaker 3: Yeah, And look, I think that's one of the reasons

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Speaker 3: we think spreads wind up probably ten to fifteen basis

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Speaker 3: points wider. And if you told me, you know, is

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Speaker 3: there a reason, Look, is there a reason they go

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Speaker 3: twenty five wider from there? Then it's got to be

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Speaker 3: way more fundamental. Is there a reason they got another

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Speaker 3: five wider from there? Yeah, I think you've nailed it.

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Speaker 3: I think I think that that supply starts to overwhelm

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Speaker 3: the market. It'll be interesting to see. You know, some

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Speaker 3: of the supply may come longer dated, which we have

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Speaker 3: seen less of in recent years, right that you know,

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Speaker 3: thirty year type supply has declined just generically speaking over time,

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Speaker 3: but their demand from Asia, which tends to buy some

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Speaker 3: of that, has held up over the course of this year.

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Speaker 3: So yeah, it is a risk, if you know, if

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Speaker 3: I want to catch one of the downside risks, of

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Speaker 3: our forecast, it's definitely one of them.

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Speaker 2: Yeah, so we're entering a year where spreads are tight

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Speaker 2: issue and expectations are rising and economic signals are somewhat

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Speaker 2: mixed in that kind of environment. What frameworks are indicators

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Speaker 2: do you think are most useful for evaluating sector rotation

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Speaker 2: opportunities and credit?

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Speaker 3: Yeah, so what's really interesting on the sector side is

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Speaker 3: most normal feeling years and like I said, wasn't that

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Speaker 3: high this year? Kind of a normal feeling year, you

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Speaker 3: would say, Okay, you know, let's look at the starting spread,

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Speaker 3: let's look at the beta related to that, and see

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Speaker 3: how it plays out. You chart that this year, it's

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Speaker 3: just a bunch of dots on a graph. It's there.

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Speaker 3: It actually doesn't have very much value. So what was

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Speaker 3: interesting is, especially in the investment grade side, what we

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Speaker 3: found is if you actually looked at that supply, the

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Speaker 3: supplying numbers, and looked at them versus the moving spreads,

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Speaker 3: they did matter a lot. So I think the change

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Speaker 3: the last question you know that that that that is

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Speaker 3: going to continue to be part of the answer. Obviously,

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Speaker 3: fundamentals always are as well. We've certainly seen some out

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Speaker 3: of favor sector some sectors we expect to continue to

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Speaker 3: have pressure. You'd look at something like chemicals where it

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Speaker 3: doesn't feel like there's a turnaround that's in it, right,

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Speaker 3: and we'd remain cautious on areas like that. Uh, and

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Speaker 3: so you've got you've got to overlay the fundamentals. But

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Speaker 3: it was interesting this year how it was much less

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Speaker 3: of a beta play and much more of what's going

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Speaker 3: on technically, which is what I would call supply.

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Speaker 2: And it feels like event driven factors, everything from asset

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Speaker 2: sales to regulatory shifts to M and A are playing

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Speaker 2: a bigger role in single name credit. How do you

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Speaker 2: see that trend evolving? And what makes a catalyst actionable

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Speaker 2: from a credit selection standpoint?

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Speaker 3: Yeah, really really good point, right, And so I would

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Speaker 3: actually start with financials to answer that question. So if

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Speaker 3: we think about, as you know, what's going on in

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Speaker 3: terms of the ability to do M and A. Look

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Speaker 3: at you know, and this is mostly on the small side, right,

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Speaker 3: but look at small bank mergers. How quickly you can

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Speaker 3: get that through under the current administration relative to what's

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Speaker 3: occurred in the past, and the ability to do that,

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Speaker 3: it's it's changed significantly. The other thing is SLR rules

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Speaker 3: we're just finalized, and if you look at the SLR rules,

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Speaker 3: the opposite is probably going to be happening. Happening on

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Speaker 3: the financial side in terms of supply, right then, so

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Speaker 3: the need you know, if anything, a lot of the

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Speaker 3: larger banks have more debt than they made need under SLR,

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Speaker 3: so you can have less pressure. And that is a

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Speaker 3: big part of It's not the only part, but it's

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Speaker 3: a big part of why we continue to like financials

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Speaker 3: expect that they can get some outperformance relative to industrials.

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Speaker 1: In twenty twenty six, going back to the private markets spread,

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Speaker 1: I mean, you must get asked about this a lot.

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Speaker 1: It's the other big theme other than AI as.

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Speaker 3: All definitely those are the two every time, right, But

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Speaker 3: it was.

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Speaker 1: The Golden Asian, then it became the age of cockroaches,

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Speaker 1: and then it became, as Mark Rowan said, we've all

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Speaker 1: lost our minds about you know, the risks that are there.

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Speaker 3: I'm just wondering what minds up in between.

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Speaker 1: Well, you get to look at this stuff all day long.

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Speaker 1: I wonder, like, you know, how you see private markets

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Speaker 1: in terms of the debt. Is it that inherently risky?

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Speaker 1: Is it really a big problem? And what impact does

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Speaker 1: it have ultimately on the public markets.

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Speaker 3: Yeah, so, so, look, I do think the truth probably

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Speaker 3: lies in between. I was joking first, but I think

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Speaker 3: on this question that probably is the answer. So I

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Speaker 3: mentioned those net supply numbers down ten percent. If we

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Speaker 3: had some of these big mega deals in private IG,

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Speaker 3: which to be fair, in past years we really haven't had.

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Speaker 3: Maybe we've had one or two a year, and it's

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Speaker 3: been ramping up over time. But you go back, you

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Speaker 3: know pre COVID virtually none of them, and you would

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Speaker 3: have had nets supply up this year. Okay, So that

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Speaker 3: took real supply out of the market. I think that

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Speaker 3: will continue. There's been a lot of capital rays that

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Speaker 3: is going to go after that. Now, what I think

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Speaker 3: sometimes gets confused is when people talk about private IG

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Speaker 3: and look, if I wasn't spending my whole days on this,

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Speaker 3: I would get confused too. In your head, it's okay,

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Speaker 3: does XYZ Corporate are they deciding should they issue a

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Speaker 3: ten year bond in the private space or should they

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Speaker 3: issue a ten year bond in the public space. That

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Speaker 3: is not most of what we are talking about in

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Speaker 3: private IG saying it can't happen, but it is the

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Speaker 3: best minority. Instead, it's related to what really is you know,

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Speaker 3: net supply if we get back to that, a CAPEX

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Speaker 3: project act, maybe an M and a related thing, and

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Speaker 3: it's typically had an asset associated with right, and so

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Speaker 3: these are really you know, somewhat secured or asset backed

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Speaker 3: typed deals, right, and so now are you know in

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Speaker 3: the sense of, you know, a lot of them have

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Speaker 3: ironclad leases are very important to you know, singlely rated

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Speaker 3: parent companies, and you have to take all of that

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Speaker 3: into account. But they're often done potentially from a separate

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Speaker 3: you know SPV right, in other words, a separate box

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Speaker 3: that is not part of the main borrowing group of

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Speaker 3: a company, which has its benefits you know, as well

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Speaker 3: as potentially some downsides in terms of being behind some

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Speaker 3: other debt with with respect to certain assets. So they

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Speaker 3: are different, right, there are different risks that are inherent

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Speaker 3: in those. I think most of those large deals that

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Speaker 3: are still part of of some of these larger corporates,

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Speaker 3: you know, the risks seem to be priced somewhat appropriately.

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Speaker 3: Were my concern lives more generally, right. And then, as

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Speaker 3: you just mentioned before, I go there on the leverage

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Speaker 3: lending side of things, right, So kind of hig yield

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Speaker 3: rated if you will, even though a lot of this

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Speaker 3: stuff doesn't get rated private credit there, Do I think leverage,

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Speaker 3: You know, we have a bunch of different stats we

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Speaker 3: can look at, But do I think on average leverage

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Speaker 3: is higher than you would see in the leverage loan market. Yeah,

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Speaker 3: I think it probably is. But pricing a half a

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Speaker 3: turn or a turn more of leverage, we can do that,

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Speaker 3: and if we think that causes additional stress, we can

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Speaker 3: look back at histories of defaults and recoveries and all

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Speaker 3: of those things, and we can price that risk. What

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Speaker 3: concerns me a bit more is as we move more

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Speaker 3: and more into the asset backed world and we move

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Speaker 3: into pools of securities that are constantly changing potentially, because

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Speaker 3: that's what the asset back world can often be as

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Speaker 3: opposed to just what I referenced earlier in private credit,

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Speaker 3: which is, hey, we build this facility. It's CAPEX related

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Speaker 3: and this is exactly what you're referencing. There's a lot

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Speaker 3: been made about who does better due diligence, well, the

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Speaker 3: ability to do due diligence in the same level on

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Speaker 3: a changing pool of borrowers. It's just lower, No matter

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Speaker 3: who's doing the due diligence. And I think that's where

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Speaker 3: some of the risks. We're also securitizing potentially cash flows

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Speaker 3: that we don't have as much to fault history on

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Speaker 3: recovery history and all of those things as markets get creative,

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Speaker 3: which also fits with my hey, it's it's probably late

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Speaker 3: cycle type theme. I mean we've seen this before, definitely

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Speaker 3: in markets. I've certainly seen it before. So I think

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Speaker 3: that's where if we continue to move into some of

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Speaker 3: these assets in the asset backworld that are you know,

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Speaker 3: not what we've securitized before, I have some concerns.

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Speaker 1: There, and more exposure to the consumer and more exposi subprime,

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Speaker 1: and more exposure to a lot of loans that may

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Speaker 1: just fall apart. Also at a time when there's just

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Speaker 1: way more demand, it seems than actual supply of these

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Speaker 1: assets to securitize. And then you know this is constant, Oh,

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Speaker 1: we need to get more yield, so let's move into

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Speaker 1: stretch of finance.

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Speaker 3: Yeah, I mean the demand is clearly there. If you

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Speaker 3: look at insurers balance sheets, the abs portion of that

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Speaker 3: balance sheet is up materially, and it's really the growth

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Speaker 3: is almost all through private ABS, and the growth has

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Speaker 3: been very concentrated. If you look at private equity owned insures,

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Speaker 3: they tend to have you know, eight nine hundred basis

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Speaker 3: points more of ABS on their balance sheet than they

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Speaker 3: do corporates relative to more traditional insures.

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Speaker 1: Right, But have we seen this movie before? I mean

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Speaker 1: we remember, we all remember two thousand and eight. I

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Speaker 1: mean that was you know, the lead up to that

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Speaker 1: was a lot of securitization of you know, products that

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Speaker 1: didn't turn out to be well, everyone told themselves it

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Speaker 1: was uncorrelated and there was a bundle of loans underlying,

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Speaker 1: so you were, you know, somewhat diversified. But you know,

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Speaker 1: give the amount of clos, given the amount of issuance

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Speaker 1: of new abs, do you worry at all that we

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Speaker 1: are creating another bubble in that market?

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Speaker 3: I worry to some degree. I don't think we're there yet,

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Speaker 3: But I think if we do go back to that analogy,

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Speaker 3: and you use CLOS as an example, right, what was

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Speaker 3: the one thing that if you're buying up in the

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Speaker 3: capital structure, even though anything that started with C and

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Speaker 3: had three letters became essentially a four letter word as

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Speaker 3: part of the credit crisis, what was the one thing

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Speaker 3: that didn't blow up at all. Right, Yeah, triple a's

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Speaker 3: double as you've never had the fault. I think there's

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Speaker 3: one single A CLO default in history. I don't think

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Speaker 3: that's changed really materially for for that product, you know.

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Speaker 3: And I think a lot of what what we're lending

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Speaker 3: against is more corporate backed than if you look at

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Speaker 3: you know, the more mortgage back stuff that we did

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Speaker 3: in that crisis, and the course of the correlation I

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Speaker 3: think works out a little bit better. And honestly, I

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Speaker 3: used to joke at coming out of the credit crisis,

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Speaker 3: I said, Okay, well, if you survive this, what could happen,

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Speaker 3: for example, in clos that could actually cause them to

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Speaker 3: blow up? I mean, I guess you could shut down

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Speaker 3: the whole economy for three to six months, but that'll

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Speaker 3: never happen. And then we did that. Right now, you

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Speaker 3: can say the government came in and helped out. But

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Speaker 3: I think generically, I still feel like these assets are

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Speaker 3: a lot better than what we saw then, But they're

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Speaker 3: also a lot riskier than where we were five years ago,

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Speaker 3: I guess the fair comment.

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Speaker 1: And we're getting more people on our show talking about

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Speaker 1: the equity and the double B and all of the

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Speaker 1: other stuff to get returns.

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Speaker 2: And so you know, zooming out a little bit. Your

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Speaker 2: team often combines systematic signals with fundamental analyst views. How

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Speaker 2: do you see that relationship evolving as investors increasingly rely

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Speaker 2: on data driven insights and what does best practice look

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Speaker 2: like when those two perspectives diverge.

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Speaker 3: Yeah, it's fascinating. And hey, we're tying in the AI

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Speaker 3: stuff again because it's constantly, constantly evolving and we're trying

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Speaker 3: to get smarter and faster and all of those things.

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Speaker 3: And look, this is something that's been happening in the

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Speaker 3: equity markets for a long time. As I spend more

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Speaker 3: time in the equity markets, certainly see more of it.

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Speaker 3: I think. Right now, what's more interesting is the credit markets,

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Speaker 3: because the credit markets are going through that evolution. I mean,

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Speaker 3: we have termed it the equidification of credit, not surprisingly

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Speaker 3: based on what I just said, but it's one of

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Speaker 3: the number one topics and it is fascinating, right and

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Speaker 3: that we've run study after study of trying to say, okay,

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Speaker 3: you know, we're unique amongst Wall Street banks, I think,

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Speaker 3: and that we've had this large credit research operation for

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Speaker 3: years and years. We can go back and mind all

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Speaker 3: the data of the teams and how they do, and

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Speaker 3: we look at that and we look at it versus

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Speaker 3: some of the best you know, systematic signals we can find,

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Speaker 3: and the answers are pretty similar that the analysts team

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Speaker 3: tends to do a little bit better, which you know,

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Speaker 3: always makes me happy. But they're similar enough. But then

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Speaker 3: when you take the signals right and overlay them on

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Speaker 3: top of the analysts recommendations, that performance is really good

432
00:21:51,000 --> 00:21:53,359
Speaker 3: and the alpha that generates it's like nothing else that

433
00:21:53,760 --> 00:21:56,080
Speaker 3: we really see. And you know, really what it does

434
00:21:56,240 --> 00:22:00,080
Speaker 3: is is when those signals, meaning the fundamental one and

435
00:22:00,160 --> 00:22:03,040
Speaker 3: the systematic one are not aligned and you kind of

436
00:22:03,119 --> 00:22:07,400
Speaker 3: kick out those examples, you're really doing a pretty darn

437
00:22:07,480 --> 00:22:10,920
Speaker 3: good job of getting rid of things that might not

438
00:22:11,080 --> 00:22:15,040
Speaker 3: work in terms of a trade and generating substantial alpha. Right,

439
00:22:15,119 --> 00:22:17,840
Speaker 3: And so we are seeing clients increasingly move that way.

440
00:22:17,920 --> 00:22:20,640
Speaker 3: Now do I think they could move that way if

441
00:22:20,680 --> 00:22:23,240
Speaker 3: we weren't seeing this equification of credit in terms of

442
00:22:23,280 --> 00:22:26,920
Speaker 3: the trading side of things, right, the ability to transact

443
00:22:27,280 --> 00:22:32,560
Speaker 3: very differently in terms of electronic but portfolio trading really,

444
00:22:33,400 --> 00:22:35,600
Speaker 3: you know, and then when you see a price in

445
00:22:35,640 --> 00:22:38,000
Speaker 3: a model knowing that, hey, there's a pretty good chance

446
00:22:38,040 --> 00:22:40,880
Speaker 3: that that's actually the price, which I mean, I would

447
00:22:40,920 --> 00:22:44,080
Speaker 3: say the I mean from the end of the credit

448
00:22:44,160 --> 00:22:46,719
Speaker 3: crisis really almost till the pandemic. The number one thing

449
00:22:47,200 --> 00:22:49,160
Speaker 3: I would hear when I walk into a meeting, since

450
00:22:49,200 --> 00:22:50,639
Speaker 3: we just talked about the two things I have to

451
00:22:50,640 --> 00:22:52,879
Speaker 3: talk about this time, was how bad liquidity was in

452
00:22:52,920 --> 00:22:56,200
Speaker 3: credit markets. I never hear that anymore. It's completely changed.

453
00:22:56,359 --> 00:22:58,560
Speaker 1: How big are the trades right now? On the portfolio trades?

454
00:22:58,920 --> 00:23:02,920
Speaker 3: Oh, well, you know, portfolio trades in you know, in

455
00:23:03,160 --> 00:23:06,480
Speaker 3: aggregate can be billions of dollars of portfolio trading. The

456
00:23:06,680 --> 00:23:09,600
Speaker 3: line items tend to be small. Now on some of

457
00:23:09,600 --> 00:23:11,280
Speaker 3: those bigger ones, of course, there are a few million

458
00:23:11,320 --> 00:23:14,520
Speaker 3: the line items. But your average portfolio trade has line

459
00:23:14,560 --> 00:23:18,879
Speaker 3: items of you know, half a million or lass because

460
00:23:18,880 --> 00:23:19,919
Speaker 3: it's dealing with those flows.

461
00:23:20,080 --> 00:23:23,160
Speaker 1: And does it inherently mean that spreads in ig credit

462
00:23:23,280 --> 00:23:25,320
Speaker 1: should be tied to because it's easier to trade.

463
00:23:25,480 --> 00:23:28,240
Speaker 3: I think that's a great question, and probably people don't

464
00:23:28,280 --> 00:23:31,040
Speaker 3: ask it enough. I think the answer to is yes so.

465
00:23:31,800 --> 00:23:35,399
Speaker 3: And I also think it explains part of the private

466
00:23:35,680 --> 00:23:41,280
Speaker 3: credit frenzy. So if you think about credit markets ig

467
00:23:41,520 --> 00:23:46,320
Speaker 3: or high yields. You had some form of liquidity premium

468
00:23:46,400 --> 00:23:49,760
Speaker 3: that should have been in those spreads historically because they

469
00:23:50,119 --> 00:23:55,200
Speaker 3: were not the most liquid things, and really the need

470
00:23:55,320 --> 00:23:58,240
Speaker 3: to have that premium in spreads today, I would argue

471
00:23:58,280 --> 00:24:02,280
Speaker 3: it doesn't exist. And so and you also would have said, hey,

472
00:24:02,359 --> 00:24:03,840
Speaker 3: some of that's in off the run, some of it's

473
00:24:03,880 --> 00:24:06,640
Speaker 3: down in quality, and now that everything has that kind

474
00:24:06,640 --> 00:24:09,760
Speaker 3: of liquidity, it doesn't exist. I think it would tell

475
00:24:09,800 --> 00:24:12,639
Speaker 3: you that, you know, on average spread should be a

476
00:24:12,680 --> 00:24:15,560
Speaker 3: bit tighter in public credit markets, So what do you do.

477
00:24:15,720 --> 00:24:18,840
Speaker 3: You wind up going into things like private credit that

478
00:24:19,200 --> 00:24:23,399
Speaker 3: certainly had a lot more of that illiquidity premium in it.

479
00:24:23,520 --> 00:24:25,879
Speaker 3: I think today we've seen a decent amount of that

480
00:24:26,040 --> 00:24:30,639
Speaker 3: evaporate in areas. Right so, you know, when there's a

481
00:24:30,680 --> 00:24:33,280
Speaker 3: potential large leverage loancoming and it could go to the

482
00:24:33,320 --> 00:24:36,400
Speaker 3: private credit markets, it could go to their probably syndicated

483
00:24:36,440 --> 00:24:38,919
Speaker 3: loan markets, a lot of that premium, if not all

484
00:24:38,960 --> 00:24:43,359
Speaker 3: of it has evaporated. Just it's obvious it's competition right now.

485
00:24:43,480 --> 00:24:45,959
Speaker 3: There are other unique deals where I think it certainly

486
00:24:46,680 --> 00:24:49,000
Speaker 3: still exists, even if not in the size it once did.

487
00:24:49,200 --> 00:24:51,040
Speaker 2: And I guess getting a little bit more micro here

488
00:24:51,080 --> 00:24:54,840
Speaker 2: and maybe leveraging some of your analysts team views. You know,

489
00:24:54,920 --> 00:24:59,040
Speaker 2: every sector you know view naturally embeds a macro assumption.

490
00:24:59,400 --> 00:25:01,600
Speaker 2: So how is your team framing the twenty twenty six

491
00:25:01,680 --> 00:25:07,440
Speaker 2: economic backdrop from growth, inflation, consumer health, funding conditions, and

492
00:25:07,520 --> 00:25:11,480
Speaker 2: how do those assumptions shape your expectations for cyclicals versus

493
00:25:11,560 --> 00:25:12,280
Speaker 2: non cyclicals.

494
00:25:12,800 --> 00:25:16,160
Speaker 3: Yeah, so we're thinking we will see another year that's

495
00:25:16,280 --> 00:25:18,480
Speaker 3: you know, growth doesn't look that dissimilar to this year,

496
00:25:18,560 --> 00:25:20,879
Speaker 3: although this year has been a bit lumpy, you know

497
00:25:20,920 --> 00:25:23,720
Speaker 3: when you kind of think of the official statistics, especially

498
00:25:23,800 --> 00:25:27,000
Speaker 3: because of the government shutdown that we just went through. Right,

499
00:25:27,080 --> 00:25:28,680
Speaker 3: But you know, if you're thinking about a year that

500
00:25:28,720 --> 00:25:31,320
Speaker 3: you could have like high one percent type growth, we

501
00:25:31,600 --> 00:25:35,879
Speaker 3: don't expect huge moves when it comes to treasure yields

502
00:25:37,080 --> 00:25:39,119
Speaker 3: as well, Right, So that's not going to have a

503
00:25:39,200 --> 00:25:42,080
Speaker 3: massive impact a little bit when it comes to two returns.

504
00:25:42,160 --> 00:25:45,440
Speaker 3: But you know, when you think about a baseline economic

505
00:25:45,720 --> 00:25:49,720
Speaker 3: scenario like that, right, as I said earlier, that's okay

506
00:25:49,880 --> 00:25:52,399
Speaker 3: for credit, or it tends to be okay for credit.

507
00:25:52,800 --> 00:25:55,320
Speaker 3: We talked about financial side, so I'll talk about the

508
00:25:55,440 --> 00:25:58,080
Speaker 3: non financial side as we think through what it means

509
00:25:58,119 --> 00:26:02,280
Speaker 3: for certain sectors. You also have to think through with

510
00:26:02,400 --> 00:26:05,760
Speaker 3: a lot of those sectors what it means based on

511
00:26:06,000 --> 00:26:09,119
Speaker 3: the makeup of it. Right, So you can look at

512
00:26:09,200 --> 00:26:12,160
Speaker 3: something like retail and high yield that you might say

513
00:26:12,240 --> 00:26:17,720
Speaker 3: still would be sensitive in a sort of low but

514
00:26:17,840 --> 00:26:21,480
Speaker 3: positive growth environment or menium growth environment, maybe we'd even

515
00:26:21,520 --> 00:26:25,320
Speaker 3: call it in these more leveraged companies. But over time

516
00:26:25,400 --> 00:26:27,640
Speaker 3: the composition of that index has changed a little bit,

517
00:26:27,880 --> 00:26:31,760
Speaker 3: and you know, I actually think it should perform okay

518
00:26:33,080 --> 00:26:35,720
Speaker 3: next year. Then you look at some areas where there's

519
00:26:35,760 --> 00:26:40,000
Speaker 3: potentially secular declining businesses and that and what that potentially

520
00:26:40,040 --> 00:26:42,119
Speaker 3: could mean. But if you look at the cyclical non

521
00:26:42,160 --> 00:26:44,840
Speaker 3: cyclical premium in general, cyclical premium, I guess this is

522
00:26:44,840 --> 00:26:47,920
Speaker 3: what we should call it. In general. You're not getting

523
00:26:47,960 --> 00:26:51,080
Speaker 3: a ton right now for that cyclical premium. I mentioned

524
00:26:51,119 --> 00:26:53,760
Speaker 3: sectors like chemicals that were a bit nervous on some

525
00:26:53,840 --> 00:26:56,320
Speaker 3: of the premiums come out of autos that was in

526
00:26:56,440 --> 00:27:00,119
Speaker 3: where we're not overly parish but also not not not

527
00:27:00,200 --> 00:27:03,000
Speaker 3: super bullsh and so you know, I think you probably

528
00:27:03,119 --> 00:27:05,679
Speaker 3: lean in a little bit to the non cyclicals at

529
00:27:05,800 --> 00:27:06,199
Speaker 3: levels here.

530
00:27:06,880 --> 00:27:08,080
Speaker 1: And the one thing you just don't want to do

531
00:27:08,240 --> 00:27:12,520
Speaker 1: is lose any money. So that's what about defaults. There

532
00:27:12,600 --> 00:27:16,160
Speaker 1: aren't that many defaults in public markets. I'm wondering whether

533
00:27:16,200 --> 00:27:18,200
Speaker 1: you think that they've been kind of you know, pushed

534
00:27:18,200 --> 00:27:20,480
Speaker 1: into the private markets or whether sort of paper it

535
00:27:20,520 --> 00:27:23,280
Speaker 1: over by the lems, the liability management you know, what's

536
00:27:23,320 --> 00:27:25,680
Speaker 1: going on with defaults? What should we be looking for there?

537
00:27:26,280 --> 00:27:28,359
Speaker 3: Yeah, well, look, the liability management stuff, you can you

538
00:27:28,440 --> 00:27:29,840
Speaker 3: can get that and you can include it in your

539
00:27:29,880 --> 00:27:33,119
Speaker 3: defaults if you so choose. And that's why the leverage

540
00:27:33,160 --> 00:27:35,399
Speaker 3: loan default rate has looked a decent amount higher than

541
00:27:35,400 --> 00:27:38,440
Speaker 3: the high yield market rate over the last few years.

542
00:27:38,480 --> 00:27:41,359
Speaker 3: We think the loan default rate will come down, maybe

543
00:27:41,440 --> 00:27:43,600
Speaker 3: not all the way to the high yield the fault rate,

544
00:27:43,600 --> 00:27:45,080
Speaker 3: which will probably be like a two to three percent

545
00:27:45,520 --> 00:27:49,760
Speaker 3: range for next year, but yeah, a lot closer to

546
00:27:49,920 --> 00:27:52,879
Speaker 3: it next year as we've worked through you know, actually

547
00:27:53,400 --> 00:27:55,960
Speaker 3: a lot of these uh, these l and mes and

548
00:27:56,040 --> 00:27:58,520
Speaker 3: I think to your point in private markets, yeah, there

549
00:27:58,600 --> 00:28:00,280
Speaker 3: was a time a few years ago where there are

550
00:28:00,359 --> 00:28:03,080
Speaker 3: some loans that were triple c and because of the

551
00:28:03,119 --> 00:28:05,159
Speaker 3: way the loan market works, and that two thirds of

552
00:28:05,200 --> 00:28:08,399
Speaker 3: the buyer base is colos who can't really be buying

553
00:28:08,480 --> 00:28:12,360
Speaker 3: new triple c's. You know, it is difficult to refinance

554
00:28:12,440 --> 00:28:15,040
Speaker 3: some of those names. You definitely saw a few of

555
00:28:15,080 --> 00:28:18,520
Speaker 3: these triple c's get refinanced into the private credit markets

556
00:28:18,520 --> 00:28:20,680
Speaker 3: where they might have been default otherwise. Now those haven't

557
00:28:20,680 --> 00:28:22,840
Speaker 3: necessarily gone on the private credit market and just defaulted.

558
00:28:22,880 --> 00:28:24,840
Speaker 3: It was probably just a better buyer and it made

559
00:28:24,880 --> 00:28:27,720
Speaker 3: more sense for those names to be in that market.

560
00:28:28,000 --> 00:28:30,080
Speaker 3: When you look at private credit, there's a lot of

561
00:28:30,119 --> 00:28:33,359
Speaker 3: people trying to figure out what default rates are, and

562
00:28:33,480 --> 00:28:36,200
Speaker 3: you can certainly look at NONIC rules. You can get

563
00:28:36,240 --> 00:28:39,640
Speaker 3: that information pretty easily. On things like BDC's, the non

564
00:28:39,680 --> 00:28:42,600
Speaker 3: AC rule rates are fairly modest and would be below

565
00:28:42,960 --> 00:28:47,680
Speaker 3: the numbers that you actually see for the public markets. Now,

566
00:28:48,440 --> 00:28:51,400
Speaker 3: if I'm saying, well, we can include L andmes in

567
00:28:51,560 --> 00:28:54,280
Speaker 3: public market default rates, it's a little bit disingenuous to

568
00:28:54,720 --> 00:28:57,880
Speaker 3: just look at non AC rules in the private markets.

569
00:28:58,160 --> 00:29:00,760
Speaker 3: There's some data that we see out there that shows,

570
00:29:01,320 --> 00:29:05,520
Speaker 3: for example, covenant defaults in private markets. If you added

571
00:29:05,600 --> 00:29:09,520
Speaker 3: that to non accrules, the numbers would look pretty darn similar,

572
00:29:10,160 --> 00:29:13,800
Speaker 3: if not a tiny bit higher than the public markets. Now,

573
00:29:13,960 --> 00:29:16,920
Speaker 3: that's probably being too harsh actually in private markets because

574
00:29:17,080 --> 00:29:21,400
Speaker 3: you know, not every covenant default rate, not every covenant

575
00:29:21,480 --> 00:29:25,600
Speaker 3: default would be enough to lead to an LME or

576
00:29:25,680 --> 00:29:28,200
Speaker 3: something like that. So I actually think the numbers point

577
00:29:28,280 --> 00:29:31,720
Speaker 3: to pretty similar levels between them. I've also seen some

578
00:29:31,800 --> 00:29:36,240
Speaker 3: studies on picks or paying payment in kind in the

579
00:29:36,320 --> 00:29:38,520
Speaker 3: private credit markets. You hear that coming up a lot.

580
00:29:38,800 --> 00:29:41,160
Speaker 3: I think you guys have discussed that in the past

581
00:29:41,840 --> 00:29:44,880
Speaker 3: on this show. And if you look at that, you know,

582
00:29:45,000 --> 00:29:47,800
Speaker 3: let's use around number, it's about ten percent of most

583
00:29:47,800 --> 00:29:49,720
Speaker 3: of the data you can find, you know, for BBC's

584
00:29:49,760 --> 00:29:53,480
Speaker 3: in other areas in private credit markets. You know, I've

585
00:29:53,520 --> 00:29:57,200
Speaker 3: seen some studies that show that okay, well you know

586
00:29:57,280 --> 00:30:00,320
Speaker 3: about you know, fifty five sixty percent of those picks

587
00:30:00,440 --> 00:30:03,640
Speaker 3: or what people have now been terming bad picks. I'm

588
00:30:04,000 --> 00:30:07,000
Speaker 3: sure you're getting familiar with, i e. What they're saying

589
00:30:07,080 --> 00:30:10,200
Speaker 3: there is picks that aren't given at the outset because

590
00:30:10,240 --> 00:30:11,840
Speaker 3: the company knows it just needs a couple of years

591
00:30:11,840 --> 00:30:14,120
Speaker 3: to grow into things. But they're picks that are part

592
00:30:14,160 --> 00:30:17,320
Speaker 3: of a renegotiation, which you know that feels like, you know,

593
00:30:17,440 --> 00:30:20,040
Speaker 3: potentially something that could have led to a public market

594
00:30:20,120 --> 00:30:21,720
Speaker 3: to fault, right, and so you can say, okay, that's

595
00:30:21,760 --> 00:30:24,240
Speaker 3: like a six percent rate. Once again, probably a little

596
00:30:24,280 --> 00:30:26,160
Speaker 3: bit too harsh to say it's a six percent of fault.

597
00:30:26,200 --> 00:30:28,920
Speaker 3: Wait for the private credit markets, it's just meant to

598
00:30:28,960 --> 00:30:31,280
Speaker 3: say that not a cruel rates. Probably not the rate

599
00:30:31,400 --> 00:30:33,480
Speaker 3: number either, And like I said, I think the numbers

600
00:30:33,520 --> 00:30:34,120
Speaker 3: are pretty similar.

601
00:30:34,480 --> 00:30:37,120
Speaker 1: So absolute a recession then it just seems like pretty

602
00:30:37,120 --> 00:30:39,520
Speaker 1: easy to avoid trouble. You just done by any triple cs.

603
00:30:39,680 --> 00:30:41,680
Speaker 1: You kind of do a bit more credit work. You

604
00:30:41,960 --> 00:30:43,560
Speaker 1: you know, stay out of things that look a bit

605
00:30:43,600 --> 00:30:45,840
Speaker 1: stress in terms of sects. But if you if you

606
00:30:45,920 --> 00:30:47,400
Speaker 1: are worried, and if you do think that, you know,

607
00:30:47,600 --> 00:30:49,920
Speaker 1: the economies may be going into a downtown or there

608
00:30:49,960 --> 00:30:52,600
Speaker 1: are other things to look out for, how would you

609
00:30:52,720 --> 00:30:55,080
Speaker 1: hedge the risk and credit right now?

610
00:30:55,600 --> 00:30:59,920
Speaker 3: Yeah, you know, if you think about it, these credit

611
00:31:00,120 --> 00:31:02,240
Speaker 3: One of the nice things about the public markets, and

612
00:31:02,280 --> 00:31:04,240
Speaker 3: maybe it's a comment about the fact that we have

613
00:31:04,520 --> 00:31:08,240
Speaker 3: public credit and private credit markets, is the quality of

614
00:31:08,440 --> 00:31:11,680
Speaker 3: those markets is the best it's been in a long time,

615
00:31:11,840 --> 00:31:14,400
Speaker 3: or amongst the best it's been in a long time. Right,

616
00:31:14,480 --> 00:31:16,600
Speaker 3: And so if you look at the investment grade market,

617
00:31:17,000 --> 00:31:20,400
Speaker 3: right within the investment grade market, we're seeing you know,

618
00:31:20,720 --> 00:31:24,080
Speaker 3: very high levels of upgrades from triple bs to single a's.

619
00:31:24,520 --> 00:31:28,840
Speaker 3: We're seeing triple b's be a much smaller portion of

620
00:31:29,560 --> 00:31:32,520
Speaker 3: the investment grade market than they've been in several years.

621
00:31:32,560 --> 00:31:35,200
Speaker 3: If you think about going into twenty twenty, let's go

622
00:31:35,280 --> 00:31:37,000
Speaker 3: back to you know, what was the most popular question

623
00:31:37,120 --> 00:31:40,040
Speaker 3: at the time. Going into twenty twenty, Everything started with

624
00:31:40,240 --> 00:31:44,400
Speaker 3: triple B bubble. Okay, that does not exist today. Now

625
00:31:44,720 --> 00:31:46,720
Speaker 3: we think there's some chunky names that can get downgrade

626
00:31:46,720 --> 00:31:50,400
Speaker 3: and we'll actually see a net fallen angel relative to

627
00:31:50,520 --> 00:31:54,320
Speaker 3: rising star year. It's a little bit more specific to

628
00:31:54,480 --> 00:31:55,200
Speaker 3: some single names.

629
00:31:55,280 --> 00:31:56,920
Speaker 1: Is that on credit quality or is it own levering

630
00:31:57,000 --> 00:31:58,200
Speaker 1: up for M and as.

631
00:31:58,760 --> 00:32:02,960
Speaker 3: It's more on credit quality and uh, some cyclical areas,

632
00:32:04,400 --> 00:32:07,200
Speaker 3: you know, and you know, some of it was past

633
00:32:07,360 --> 00:32:09,600
Speaker 3: M and A right, you know, how to WBD get

634
00:32:09,640 --> 00:32:12,200
Speaker 3: downgraded this year was past M and A right, and

635
00:32:12,320 --> 00:32:17,280
Speaker 3: so you know it's some isolatedt stuff, but you know,

636
00:32:17,680 --> 00:32:21,360
Speaker 3: within ig actually we've seen a huge net upgrade ratio

637
00:32:21,480 --> 00:32:24,200
Speaker 3: and I think with triple B is shrinking in general, right,

638
00:32:24,320 --> 00:32:28,040
Speaker 3: it's actually an interesting part of the credit markets to own.

639
00:32:28,040 --> 00:32:30,160
Speaker 3: Then you look at the high yield market and with

640
00:32:30,280 --> 00:32:34,560
Speaker 3: the exception of right after COVID when when a bunch

641
00:32:34,560 --> 00:32:38,080
Speaker 3: of stuff got downgraded, you really have one of the

642
00:32:38,160 --> 00:32:41,640
Speaker 3: highest double B portions of the market ever, so you

643
00:32:41,760 --> 00:32:44,760
Speaker 3: actually have places, you know, because we can use the

644
00:32:44,840 --> 00:32:47,400
Speaker 3: term hide out. But the ability to do that definitely

645
00:32:47,520 --> 00:32:51,080
Speaker 3: exists in today's markets. Now, you know, the double B

646
00:32:51,160 --> 00:32:54,280
Speaker 3: single bee ratio this point in time is a bit tight.

647
00:32:54,480 --> 00:32:55,920
Speaker 3: So you know, maybe say, okay, I don't want to

648
00:32:55,960 --> 00:32:59,560
Speaker 3: add too much to double b's today. And look, I

649
00:32:59,600 --> 00:33:03,120
Speaker 3: think to your point on avoiding triple c's. While we're

650
00:33:03,160 --> 00:33:04,480
Speaker 3: not going to sit here and pound the table on

651
00:33:04,560 --> 00:33:06,720
Speaker 3: triple c's, it is the only part of the credit

652
00:33:06,800 --> 00:33:09,720
Speaker 3: market that if you look at in a historical context,

653
00:33:10,160 --> 00:33:14,240
Speaker 3: you could argue that from a spread standpoint, it's cheap.

654
00:33:14,720 --> 00:33:17,000
Speaker 3: And so that tells me you can't ignore it either,

655
00:33:17,560 --> 00:33:20,360
Speaker 3: and you've got to pick and choose there Also.

656
00:33:20,200 --> 00:33:22,320
Speaker 1: On spread, though, the gap between double be's and triple

657
00:33:22,360 --> 00:33:24,120
Speaker 1: be's is not very big, so you're not really getting

658
00:33:24,160 --> 00:33:28,440
Speaker 1: paid that much to take more junk risk. Therefore, is

659
00:33:28,520 --> 00:33:31,200
Speaker 1: it not you know, simple just to say triple b's

660
00:33:31,240 --> 00:33:31,800
Speaker 1: and you know, I.

661
00:33:31,800 --> 00:33:34,320
Speaker 3: Think triple b's look good right now. Yes, to answer

662
00:33:34,360 --> 00:33:38,600
Speaker 3: your question, it looks like a sweet sports spot. Certainly

663
00:33:39,520 --> 00:33:44,000
Speaker 3: of markets today. You know, there's that double B tribleship

664
00:33:44,120 --> 00:33:47,800
Speaker 3: can tend to change very very rapidly. But I agree

665
00:33:47,840 --> 00:33:49,320
Speaker 3: if you look at it today, it does it does

666
00:33:49,400 --> 00:33:49,840
Speaker 3: look better.

667
00:33:50,160 --> 00:33:53,280
Speaker 1: So in terms of the globe, I mean, I love

668
00:33:53,280 --> 00:33:55,680
Speaker 1: the fact you have a global responsibility. We don't get

669
00:33:55,720 --> 00:33:57,480
Speaker 1: to talk enough about the rest of the world here.

670
00:33:58,480 --> 00:34:02,120
Speaker 1: We we have had, you know, swings. It's maybe off

671
00:34:02,160 --> 00:34:04,720
Speaker 1: the Liberation day of you know, look at our portfolio

672
00:34:04,920 --> 00:34:08,120
Speaker 1: so long the US, We've got to start diversifying. Everyone

673
00:34:08,320 --> 00:34:11,000
Speaker 1: kind of had that reaction to the tariffs that kind

674
00:34:11,040 --> 00:34:13,200
Speaker 1: of faded a bit. But what are you thinking in

675
00:34:13,280 --> 00:34:16,360
Speaker 1: terms of opportunities in Europe? And you know, how does

676
00:34:16,400 --> 00:34:17,160
Speaker 1: it compared to the US.

677
00:34:17,480 --> 00:34:20,600
Speaker 3: Yeah, so the Cell America narrative, right, which is probably

678
00:34:21,040 --> 00:34:24,719
Speaker 3: what you were referring to, it didn't really amount too

679
00:34:24,800 --> 00:34:27,760
Speaker 3: much in my opinion, you know, where their marginal flows

680
00:34:28,440 --> 00:34:30,879
Speaker 3: that didn't come to the US. I think that's true.

681
00:34:30,880 --> 00:34:33,640
Speaker 3: I think there was less selling. Look a year ago

682
00:34:34,760 --> 00:34:36,600
Speaker 3: we put on an outlook and we said Europe look

683
00:34:36,640 --> 00:34:41,840
Speaker 3: really cheap from a spread standpoint, and it has performed

684
00:34:41,920 --> 00:34:45,080
Speaker 3: quite well. If we look at it today, marginally cheap.

685
00:34:46,000 --> 00:34:48,120
Speaker 3: I would say, you know, if I had a pick,

686
00:34:48,440 --> 00:34:51,560
Speaker 3: you know, who would have perform next year, probably Europe.

687
00:34:51,560 --> 00:34:55,399
Speaker 3: But it's by a really slim margin at this point.

688
00:34:56,160 --> 00:34:59,800
Speaker 3: And look, some of that is while the growth picture

689
00:35:00,120 --> 00:35:02,400
Speaker 3: is you know, growth picture, it you know, from an

690
00:35:02,400 --> 00:35:04,839
Speaker 3: absolute standpoint should be a little better in the US,

691
00:35:04,920 --> 00:35:07,320
Speaker 3: that's been the case for a long time. The delta

692
00:35:07,440 --> 00:35:09,239
Speaker 3: should be a little bit lower. A lot of that

693
00:35:09,800 --> 00:35:14,000
Speaker 3: obviously is uh, you know, kind of boosting fiscal spending,

694
00:35:14,080 --> 00:35:16,759
Speaker 3: with Germany being the empicenter of that. We got through

695
00:35:16,840 --> 00:35:22,320
Speaker 3: the UK budget seemingly without the worst results in the

696
00:35:22,400 --> 00:35:25,080
Speaker 3: past week. There's still a lot of risks coming out

697
00:35:25,120 --> 00:35:29,000
Speaker 3: of France, you know, as they struggle to pass budgets

698
00:35:29,040 --> 00:35:31,279
Speaker 3: and and form governments and all those things. So there

699
00:35:31,320 --> 00:35:35,279
Speaker 3: are some risks like that. But at the same time,

700
00:35:35,320 --> 00:35:36,920
Speaker 3: with a little bit of that, more of the fiscal

701
00:35:36,960 --> 00:35:40,040
Speaker 3: stabilizer over in Europe than we've had in the past,

702
00:35:40,800 --> 00:35:43,440
Speaker 3: it probably gives you enough stability to get very marginal

703
00:35:43,520 --> 00:35:44,200
Speaker 3: out performance.

704
00:35:44,560 --> 00:35:47,120
Speaker 1: Is there a risk the fysical spending, all this defense

705
00:35:47,880 --> 00:35:52,040
Speaker 1: spending particularly crowds out the corporates in the European market.

706
00:35:52,520 --> 00:35:54,920
Speaker 3: It's a risk, you know, it's certainly a risk. And

707
00:35:55,280 --> 00:35:58,320
Speaker 3: and when you look at the defense spending, you know,

708
00:35:58,520 --> 00:36:02,439
Speaker 3: in general you can see, okay, Germany's the biggest chunk

709
00:36:02,480 --> 00:36:04,600
Speaker 3: of it as they kind of you know, loosened up

710
00:36:04,600 --> 00:36:09,520
Speaker 3: the debt break, but everyone is spending more right across Europe,

711
00:36:10,200 --> 00:36:12,120
Speaker 3: and you know, I think most of it will be

712
00:36:12,200 --> 00:36:15,319
Speaker 3: spent on European companies. Obviously not all of it will,

713
00:36:15,440 --> 00:36:19,239
Speaker 3: so there should be some boosts there. But look, there's

714
00:36:19,960 --> 00:36:24,040
Speaker 3: certainly a risk. However, you know, I think when you're

715
00:36:24,080 --> 00:36:27,400
Speaker 3: in a world that's unfortunately as viollatile as it is today,

716
00:36:27,680 --> 00:36:31,279
Speaker 3: I think we continue to see that spending and it

717
00:36:31,440 --> 00:36:35,239
Speaker 3: is incremental in some way, at least to what we

718
00:36:35,320 --> 00:36:37,799
Speaker 3: were seeing versus say, twelve months ago. Right.

719
00:36:38,120 --> 00:36:40,520
Speaker 1: Asia's also another market we don't get enough to talk

720
00:36:40,520 --> 00:36:44,160
Speaker 1: about here. China was, you know, not that longer uninvestible

721
00:36:44,239 --> 00:36:46,200
Speaker 1: to most people, but now it has become you know,

722
00:36:46,360 --> 00:36:48,600
Speaker 1: it's back in the fold. It's the potential. We're still

723
00:36:48,640 --> 00:36:51,759
Speaker 1: going through the housing and you know, real estate crisis there,

724
00:36:52,719 --> 00:36:55,200
Speaker 1: but there seems to be appetite and certainly there's yield

725
00:36:55,239 --> 00:36:58,320
Speaker 1: and there's return if you go that way. Do you

726
00:36:58,400 --> 00:36:59,600
Speaker 1: see any opportunity and.

727
00:37:00,520 --> 00:37:04,920
Speaker 3: We talk about credit markets, right, what happened for years

728
00:37:05,000 --> 00:37:08,040
Speaker 3: and years was that China and Asia were becoming a

729
00:37:08,160 --> 00:37:11,040
Speaker 3: much bigger portion of any EM portfolio, especially on the

730
00:37:11,080 --> 00:37:15,200
Speaker 3: high yield side with property right, and I mean, those

731
00:37:15,280 --> 00:37:19,440
Speaker 3: property bonds have shrunk massively the amount outstanding because of

732
00:37:19,520 --> 00:37:23,120
Speaker 3: defaults and structuring and all of those things. So I

733
00:37:23,160 --> 00:37:26,320
Speaker 3: think it's a bit tougher to focus on that just

734
00:37:26,440 --> 00:37:28,440
Speaker 3: just not a lot left. And we do think the

735
00:37:28,480 --> 00:37:32,759
Speaker 3: property sector still has issues moving forward, right, Instead, it

736
00:37:32,840 --> 00:37:36,520
Speaker 3: becomes a little bit more of the TMT space on

737
00:37:36,640 --> 00:37:39,399
Speaker 3: the IG side, really on the high yeld side, it's

738
00:37:39,440 --> 00:37:42,400
Speaker 3: more of like Macaw gaming and stuff like that, and

739
00:37:42,480 --> 00:37:45,319
Speaker 3: it's becoming a smaller part. And then instead, what you're

740
00:37:45,360 --> 00:37:48,920
Speaker 3: finding is that in the EM landscape overall, you're actually

741
00:37:49,040 --> 00:37:52,919
Speaker 3: seeing the rest of the world become a bigger portion

742
00:37:53,080 --> 00:37:55,920
Speaker 3: of it. And if you look at where that issuance

743
00:37:56,040 --> 00:37:58,440
Speaker 3: is occurring, and you know, if we think through next year,

744
00:37:58,560 --> 00:38:00,800
Speaker 3: especially in the higher quality stuff, it's really going to

745
00:38:00,840 --> 00:38:04,279
Speaker 3: be the GCC Middle East area that's adding a lot

746
00:38:05,000 --> 00:38:08,040
Speaker 3: to the net issuance. And you know, and and ironically

747
00:38:08,160 --> 00:38:11,480
Speaker 3: some of that gets bought as a replacement out in Asia, right,

748
00:38:11,600 --> 00:38:14,120
Speaker 3: but to replace some of the issuance that traditionally was

749
00:38:14,200 --> 00:38:17,120
Speaker 3: coming maybe from China, right, and so we think that'll

750
00:38:17,160 --> 00:38:19,920
Speaker 3: remain interesting. I mean, Latin America has certainly been interesting

751
00:38:20,000 --> 00:38:22,840
Speaker 3: on the corporate side. Brazilian corporates have been really validle

752
00:38:22,880 --> 00:38:24,560
Speaker 3: it feels like we're at a point right now, or

753
00:38:24,640 --> 00:38:28,719
Speaker 3: maybe moving towards the other side of that. But you know,

754
00:38:28,880 --> 00:38:31,600
Speaker 3: there's there's gonna be plenty of interesting things in the MS,

755
00:38:31,840 --> 00:38:32,440
Speaker 3: there always is.

756
00:38:32,760 --> 00:38:35,200
Speaker 1: But you think the best relative value remains in the US.

757
00:38:36,040 --> 00:38:39,640
Speaker 3: You know, look, I think the US is the market

758
00:38:40,120 --> 00:38:44,920
Speaker 3: that is large liquid, and you you know, you are

759
00:38:44,960 --> 00:38:48,439
Speaker 3: able to invest position and take different views. I would

760
00:38:48,520 --> 00:38:53,160
Speaker 3: say I could see, you know, Europe outperforming very marginally,

761
00:38:53,920 --> 00:38:56,480
Speaker 3: so so I guess a tiny bit of a relative

762
00:38:56,600 --> 00:39:00,640
Speaker 3: value lean to Europe, but not new as strong as

763
00:39:00,680 --> 00:39:03,560
Speaker 3: we felt last year when European spreads were clearly cheap

764
00:39:04,040 --> 00:39:04,680
Speaker 3: to US spreads.

765
00:39:04,920 --> 00:39:07,160
Speaker 1: You do a lot of traveling, You talk to people

766
00:39:07,239 --> 00:39:09,360
Speaker 1: all around the world. What kind of questions are they

767
00:39:09,400 --> 00:39:13,000
Speaker 1: asking you right now about credit markets? How interested? Alicuely,

768
00:39:13,000 --> 00:39:16,480
Speaker 1: I'm interested in the the funds that could invest in anything,

769
00:39:16,719 --> 00:39:19,400
Speaker 1: And you know, what what do they what do they make?

770
00:39:19,480 --> 00:39:19,880
Speaker 3: Of credit.

771
00:39:20,440 --> 00:39:21,720
Speaker 1: Yeah, it seems to be more popular.

772
00:39:22,360 --> 00:39:24,759
Speaker 3: It is, but not always for good reasons. I guess

773
00:39:24,760 --> 00:39:25,520
Speaker 3: that is what I would say.

774
00:39:25,719 --> 00:39:27,399
Speaker 1: Okay, tell us about the bad reasons.

775
00:39:27,480 --> 00:39:30,360
Speaker 3: Yeah, yeah, Well I think I think you sort of

776
00:39:30,440 --> 00:39:33,320
Speaker 3: hit on it a little bit earlier, right, And so

777
00:39:34,719 --> 00:39:38,200
Speaker 3: when you've got the comment like the cockroaches comment, people

778
00:39:38,400 --> 00:39:40,719
Speaker 3: want to know about that when they know your background

779
00:39:41,160 --> 00:39:43,600
Speaker 3: is certainly on the on the credit side. And then

780
00:39:44,800 --> 00:39:46,879
Speaker 3: when you think about the AI, when you think about

781
00:39:46,920 --> 00:39:49,040
Speaker 3: the cap X funding, you know, for a long time,

782
00:39:49,480 --> 00:39:53,920
Speaker 3: AI was just a story and inequity markets, and in

783
00:39:54,040 --> 00:39:56,680
Speaker 3: my opinion, it really wasn't that interesting for credit markets

784
00:39:56,719 --> 00:39:59,320
Speaker 3: because the low beta nature of a lot of those names,

785
00:39:59,400 --> 00:40:02,560
Speaker 3: and you know that being said, you know, some of

786
00:40:02,600 --> 00:40:05,600
Speaker 3: these private credit deals even strike the interests of people

787
00:40:05,640 --> 00:40:07,600
Speaker 3: who from outside the asset class when they see they

788
00:40:07,640 --> 00:40:11,560
Speaker 3: can potentially get those those kind of spreads on the

789
00:40:11,840 --> 00:40:14,879
Speaker 3: on the death side, right, it makes you know, could

790
00:40:15,120 --> 00:40:18,120
Speaker 3: potentially make sense for people. I think, to your point,

791
00:40:18,920 --> 00:40:22,160
Speaker 3: we are seeing people look at interesting ways, you know,

792
00:40:22,280 --> 00:40:25,280
Speaker 3: to securitize things we have seen. You know, you mentioned

793
00:40:25,840 --> 00:40:28,319
Speaker 3: you know, Colo Equity and double b's and those kind

794
00:40:28,320 --> 00:40:30,440
Speaker 3: of things, you know, in a world where yields are

795
00:40:30,440 --> 00:40:33,560
Speaker 3: a little bit lower, those are going to garner focus, right,

796
00:40:33,640 --> 00:40:37,480
Speaker 3: and so structure is going to continue to garner focus.

797
00:40:37,600 --> 00:40:40,279
Speaker 3: But look, a lot of it right now is the

798
00:40:40,440 --> 00:40:44,279
Speaker 3: question of is credit the canary in the coal mine

799
00:40:44,360 --> 00:40:46,600
Speaker 3: or what do you know that our market doesn't know?

800
00:40:46,640 --> 00:40:48,440
Speaker 3: And obviously equity markets have been a little bit more

801
00:40:48,520 --> 00:40:51,760
Speaker 3: volatile recently, but still trading it decently high multiples.

802
00:40:51,920 --> 00:40:54,080
Speaker 1: When you're talking about AI to people that don't look

803
00:40:54,080 --> 00:40:56,440
Speaker 1: at credit all the time, and they're discussing it, let's

804
00:40:56,440 --> 00:40:58,560
Speaker 1: say an Oracle thirty year bond or another reason with

805
00:40:58,600 --> 00:41:01,040
Speaker 1: thirty year bond, you know you'll you'll aim in credit

806
00:41:01,080 --> 00:41:03,000
Speaker 1: is to get your money back. Yes, and this is

807
00:41:03,080 --> 00:41:04,880
Speaker 1: business where you've don't know what's going to happen tomorrow,

808
00:41:05,120 --> 00:41:07,400
Speaker 1: let alone thirty years later. How do you kind of

809
00:41:07,560 --> 00:41:11,640
Speaker 1: reconcile you know, the lung term debt investment for some

810
00:41:11,760 --> 00:41:14,719
Speaker 1: of these projects that you know appear entirely speculative to me.

811
00:41:15,040 --> 00:41:17,279
Speaker 3: Yeah, and that's and that's why I think as we

812
00:41:17,400 --> 00:41:21,359
Speaker 3: move forward, if we continue to see issue in out

813
00:41:21,600 --> 00:41:24,080
Speaker 3: the curve, it'll be interesting to see the appetite for that,

814
00:41:24,239 --> 00:41:27,640
Speaker 3: especially in a market that hasn't seen as much thirty

815
00:41:27,719 --> 00:41:30,480
Speaker 3: year type investments. But look, I mean we could have

816
00:41:30,520 --> 00:41:33,319
Speaker 3: probably make the same argument for ten year type paper, right.

817
00:41:34,000 --> 00:41:36,319
Speaker 3: And what's been interesting though, is in a highal market,

818
00:41:36,360 --> 00:41:40,000
Speaker 3: which is more speculative, right, ten year bonds when I started,

819
00:41:40,680 --> 00:41:43,120
Speaker 3: every bomb was a ten year non call five right.

820
00:41:44,040 --> 00:41:47,320
Speaker 3: We don't see those anymore. Almost no one issues outside

821
00:41:47,320 --> 00:41:50,400
Speaker 3: of eight years in high yield. Now those bonds are callable,

822
00:41:50,440 --> 00:41:52,799
Speaker 3: and people are always thinking that they could potentially call

823
00:41:52,840 --> 00:41:54,680
Speaker 3: them and refinance them at a better rate. And you

824
00:41:54,680 --> 00:41:56,960
Speaker 3: can argue that's part of it, but I think part

825
00:41:57,000 --> 00:42:00,719
Speaker 3: of it is, you know, as more speculative companies, you

826
00:42:01,000 --> 00:42:03,960
Speaker 3: don't issue that for out the curve, right, And so

827
00:42:04,920 --> 00:42:07,480
Speaker 3: we could certainly see some transit issuance. But but look,

828
00:42:07,760 --> 00:42:09,719
Speaker 3: when you think about some of these data centers, they're

829
00:42:09,840 --> 00:42:13,320
Speaker 3: signing leases off in like twenty year type leases that

830
00:42:13,440 --> 00:42:16,600
Speaker 3: are quite binding, and so there is the ability to

831
00:42:16,640 --> 00:42:19,440
Speaker 3: definitely support the cash flows for a long period of time.

832
00:42:19,560 --> 00:42:21,160
Speaker 3: So maybe it doesn't go out with thirty years, maybe

833
00:42:21,160 --> 00:42:23,080
Speaker 3: it winds up being twenty year bonds. But I think

834
00:42:23,120 --> 00:42:27,000
Speaker 3: if you have those clear leases that no one can

835
00:42:27,040 --> 00:42:29,319
Speaker 3: get out of, and most of the hyperscales have been

836
00:42:29,360 --> 00:42:32,400
Speaker 3: clear about that, then your ability to issue debt with

837
00:42:32,480 --> 00:42:33,680
Speaker 3: some term will exist.

838
00:42:34,040 --> 00:42:36,920
Speaker 1: Hoping though that you're in a company that whose technology

839
00:42:36,960 --> 00:42:38,440
Speaker 1: is not going to be absolete.

840
00:42:38,640 --> 00:42:42,520
Speaker 3: Yes, the technology side of things is at some point mark, which.

841
00:42:42,560 --> 00:42:45,640
Speaker 1: You know concerns me. But going back to forecasting, one

842
00:42:45,680 --> 00:42:48,280
Speaker 1: of our guest studies year described forecasting as a crime

843
00:42:48,360 --> 00:42:50,719
Speaker 1: on wool Street. It was actually a crime. You could

844
00:42:50,719 --> 00:42:52,840
Speaker 1: get fined or punished or something for it. You do

845
00:42:53,040 --> 00:42:54,799
Speaker 1: have to forecast. So you were very good this year

846
00:42:54,840 --> 00:42:56,960
Speaker 1: in terms of your IG spread forecast. You said it

847
00:42:57,000 --> 00:42:59,240
Speaker 1: would end in an eighty five to ninety basis points

848
00:42:59,320 --> 00:43:01,040
Speaker 1: ranged by the end of the year. Wait below that,

849
00:43:01,160 --> 00:43:03,800
Speaker 1: but we could will wide. Now ilet'll say, still a

850
00:43:03,840 --> 00:43:06,319
Speaker 1: good cool But what did you get wrong about this year?

851
00:43:06,400 --> 00:43:08,200
Speaker 1: And you know where did you get calls off God?

852
00:43:08,239 --> 00:43:13,120
Speaker 3: And why do you think? Yeah? Look, so I think

853
00:43:13,719 --> 00:43:17,800
Speaker 3: understanding just how extreme the moves were going to be

854
00:43:18,600 --> 00:43:24,080
Speaker 3: in both directions around Liberation Day was not easy for most.

855
00:43:25,360 --> 00:43:29,040
Speaker 3: It certainly did feel like a buying opportunity at some point.

856
00:43:30,360 --> 00:43:33,200
Speaker 3: But I wouldn't say we perfectly called the tops and

857
00:43:34,440 --> 00:43:38,560
Speaker 3: bottoms around that. I think you know where we've had

858
00:43:38,640 --> 00:43:43,759
Speaker 3: a view that's been helpful is that as we work

859
00:43:43,840 --> 00:43:46,320
Speaker 3: through that and really start to do the math around

860
00:43:46,440 --> 00:43:48,879
Speaker 3: it and realize that the tariffs were going to add

861
00:43:48,960 --> 00:43:50,840
Speaker 3: up to a lot of revenue and that the deficit

862
00:43:50,960 --> 00:43:55,279
Speaker 3: side of things was not going to be as bad

863
00:43:55,400 --> 00:43:58,080
Speaker 3: probably in twenty twenty six as a result of the

864
00:43:58,120 --> 00:44:00,680
Speaker 3: tariff revenues. Now, let's obviously they've got some core cases

865
00:44:00,719 --> 00:44:04,440
Speaker 3: coming up too, I understand that, but based on the

866
00:44:04,520 --> 00:44:07,920
Speaker 3: current status quo, that that was going to lead to

867
00:44:08,000 --> 00:44:10,640
Speaker 3: a little bit better environment in terms of the risks

868
00:44:10,680 --> 00:44:13,400
Speaker 3: that people were seeing in a sell off and treasuries

869
00:44:13,440 --> 00:44:15,360
Speaker 3: which were going to be a general risk off event.

870
00:44:15,760 --> 00:44:17,640
Speaker 3: I think that's something we were able to focus on

871
00:44:17,800 --> 00:44:21,920
Speaker 3: and identify as part of that next move tighter. You know,

872
00:44:22,000 --> 00:44:23,840
Speaker 3: even if we didn't get the first one, and it.

873
00:44:23,880 --> 00:44:25,719
Speaker 1: Terms of focusing out for next year, what are you

874
00:44:25,800 --> 00:44:27,880
Speaker 1: most worried about in terms of you know this, if

875
00:44:27,960 --> 00:44:30,399
Speaker 1: this thing happens, then all bets are off.

876
00:44:30,800 --> 00:44:35,320
Speaker 3: Yeah. Look, I think you know to your point on

877
00:44:35,440 --> 00:44:37,479
Speaker 3: the technology change, right. So we had the deep seek

878
00:44:37,560 --> 00:44:40,400
Speaker 3: moment at the beginning of this year, which was a

879
00:44:40,480 --> 00:44:43,040
Speaker 3: real freak out for a lot of people. Turned out

880
00:44:43,080 --> 00:44:44,840
Speaker 3: at least in the short term that that shouldn't have

881
00:44:45,040 --> 00:44:50,800
Speaker 3: been that troubling for markets. But I think, you know,

882
00:44:51,040 --> 00:44:53,040
Speaker 3: as the technology changes, if we get to a point

883
00:44:53,040 --> 00:44:54,759
Speaker 3: where we see a lot of this issuance coming to

884
00:44:54,840 --> 00:44:58,520
Speaker 3: the market, and then there's some changes where maybe certain

885
00:44:58,560 --> 00:45:00,360
Speaker 3: things are a little bit less viable, a little bit

886
00:45:00,440 --> 00:45:04,040
Speaker 3: less attractive, and you've already stuck the market with off

887
00:45:04,160 --> 00:45:06,919
Speaker 3: that paper, I think that leads to some downside risks

888
00:45:07,000 --> 00:45:09,759
Speaker 3: that we're not fully putting in our forecast at least.

889
00:45:10,040 --> 00:45:12,560
Speaker 1: And we started the call talking about the late cycle,

890
00:45:13,239 --> 00:45:15,399
Speaker 1: and you use the word innings, and we've got loads

891
00:45:15,400 --> 00:45:17,760
Speaker 1: of baseball fans, although I don't really understand the game myself,

892
00:45:17,800 --> 00:45:19,040
Speaker 1: but what inning are we actually in?

893
00:45:20,800 --> 00:45:23,200
Speaker 3: You know, I think we're approaching the seventh inning stretch here.

894
00:45:23,239 --> 00:45:26,840
Speaker 1: Probably we'll see, we'll see, all right. Brilliant, great stuff.

895
00:45:27,080 --> 00:45:29,200
Speaker 1: Brad Rogoff from Berkley's, thank you so much for joining

896
00:45:29,280 --> 00:45:29,440
Speaker 1: us on.

897
00:45:29,440 --> 00:45:29,960
Speaker 3: The Credit Edge.

898
00:45:30,239 --> 00:45:31,879
Speaker 1: Thank you guys both for having me, and of course

899
00:45:31,960 --> 00:45:35,120
Speaker 1: we're very grateful to Mike camp Alone from Bloomberg Intelligence. Cheers, Mike,

900
00:45:35,680 --> 00:45:38,200
Speaker 1: thank you very much for even more credit market analysis

901
00:45:38,239 --> 00:45:39,840
Speaker 1: and insight. Read all of Mike's great work on the

902
00:45:39,880 --> 00:45:42,920
Speaker 1: Bloomberg Terminal. Bloomberg Intelligence is part of our research department,

903
00:45:43,000 --> 00:45:46,200
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904
00:45:46,360 --> 00:45:49,480
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905
00:45:49,480 --> 00:45:52,240
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906
00:45:52,360 --> 00:45:55,839
Speaker 1: currencies and commodities. Please do subscribe to The Credit Edge

907
00:45:55,880 --> 00:45:58,719
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908
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909
00:46:01,760 --> 00:46:05,000
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910
00:46:05,120 --> 00:46:08,600
Speaker 1: or email me directly at jcrombieight at Bloomberg dot net.

911
00:46:09,200 --> 00:46:11,600
Speaker 1: I'm James Crombie. It's been a pleasure having you join

912
00:46:11,680 --> 00:46:13,759
Speaker 1: us again next week on the Credit Edge