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Speaker 1: Hello, and welcome to The Credit Edge, a weekly markets podcast.

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Speaker 1: My name is James Crombie. I'm a senior editor at Bloomberg.

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Speaker 1: This week, we're very pleased to have on the show

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Speaker 1: Janine A. Mordeo, who covers loans for Bloomberg News in

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Speaker 1: New York.

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Speaker 2: How are you, Janine, I'm well, James, thank you and

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Speaker 2: good morning. Thank you for having me on today.

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Speaker 1: Very excited to get your take on the markets. We're

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Speaker 1: also delighted to see Mary Ellen Olson, who looks at

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Speaker 1: commodities for Bloomberg Intelligence in Hong Kong. We'll be coming

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Speaker 1: back to Mary Ellen a bit later in the show

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Speaker 1: to talk about Indonesian high yield companies and electric vehicles.

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Speaker 1: So do stay with us. But first, Janine Amadeo with

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Speaker 1: Bloomberg News, you're the zen master of loans, one of

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Speaker 1: my very favorite markets to cover. We've been working together

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Speaker 1: for more than a decade. We were in the market

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Speaker 1: on the cell side for quite a while before that,

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Speaker 1: so we're really delighted to have you on the show.

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Speaker 2: Thank you.

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Speaker 1: Leverage loans it's a one point four trillion roughly dollar market.

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Speaker 1: It's the best performing part of credit this year with

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Speaker 1: gains almost eight percent, making this I think the best

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Speaker 1: year since two thousand and nine, so it really does

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Speaker 1: stand out. But I'm just kind of when you get

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Speaker 1: a sense for you to start off, gie, what's the

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Speaker 1: tone right now in the leverage loan market?

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Speaker 2: Right now, we're actually having a euphoric risk one period.

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Speaker 2: It had been quiet for a while when we've had

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Speaker 2: some more concerns about FED raid hikes, but since there

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Speaker 2: is news that they may pause, the equity markets have

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Speaker 2: been soaring and doing quite well this year, and leverage

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Speaker 2: loans have gone in tandem with that.

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Speaker 1: So just for the people that don't know this market

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Speaker 1: very well, I mean, what is a leverage loan? How

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Speaker 1: do they work? Break it down for us a bit

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Speaker 1: of course.

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Speaker 2: So leverage loans are loans that are too sub investment

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Speaker 2: grade companies. Generally, it could be for any company, even

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Speaker 2: in your neighborhood. It could be, you know, a lumber plant,

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Speaker 2: it could be a tire company. And how they're structured,

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Speaker 2: they are generally speaking, seven years non amortizing that are

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Speaker 2: bought by collateralized loan obligations who are the biggest buyers

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Speaker 2: of this product, and they trade and some.

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Speaker 1: Of them pretty big, right you've get talking about you know,

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Speaker 1: tens of billions of dollars in some cases billions.

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Speaker 2: Sometimes they could be a fifty million dollar add on,

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Speaker 2: you know, to all equal to one point four trillion

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Speaker 2: dollar total asset classes.

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Speaker 1: And even though you've talked about high yield and you

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Speaker 1: know that sort of implies risk, they are sort of

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Speaker 1: household names in lots of cases. I mean, there are

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Speaker 1: companies in there that we recognize from the.

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Speaker 2: Right, Like we recently had a deal for Carnival Cruise

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Speaker 2: Lines that came back in Carnival Corp. There's SeaWorld just

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Speaker 2: did a repricing. So yes, very large. Some public companies.

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Speaker 2: Many of these companies and leverage loans are companies that

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Speaker 2: were bought out by private equity, so leverage buyouts, and

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Speaker 2: that makes up a big portion of leverage loans M

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Speaker 2: and A.

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Speaker 1: So from the investor side, why would investors like them

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Speaker 1: in a rising rate environment?

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Speaker 2: Well, right now, the benchmark rate is called sour and

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Speaker 2: it's a floating rate. We had library before, but we

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Speaker 2: transition to sour, and in a rising rate environment, your

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Speaker 2: benchmark rate is increasing. So the way lenders make money

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Speaker 2: is the benchmark rate plus the margin plus a credit

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Speaker 2: spread adjustment now for live or as well as receiving

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Speaker 2: the loans at a discount generally and so under par.

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Speaker 2: And so in this environment where rates have been rising,

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Speaker 2: lenders are then earning more interest income.

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Speaker 1: And have the margins also been increasing.

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Speaker 2: The margins have been increasing. We had a difficult period

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Speaker 2: of time back in twenty twenty two when we had

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Speaker 2: a ton of hung debt, which is debt for deals

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Speaker 2: that were closed before they were sold, to the tune

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Speaker 2: of something like forty billion dollars. So after that, prices

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Speaker 2: in general moved up for margins and discounts.

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Speaker 1: And just to go back to that hung debt point

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Speaker 1: which you raised, I mean, we're going to come back

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Speaker 1: to that in a bit. But hung debt basically, as

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Speaker 1: I understand it, banks are agreeing to lend money to

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Speaker 1: companies and they kind of lock in a rate. But

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Speaker 1: then the market changes, so you know, banks typically sell

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Speaker 1: this stuff onto other investors, right, and then when the

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Speaker 1: market suddenly changes, banks end up holding it and they're

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Speaker 1: not they don't actually want to hold it, but they

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Speaker 1: end up with it on their balance sheet.

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Speaker 2: Exactly, so they're holding it on their balance sheet. A

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Speaker 2: lot of that actually has been whittled down since the

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Speaker 2: beginning of the year as we've been in a more

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Speaker 2: risk gone mode, and deals like Nielsen Citrix have basically

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Speaker 2: sold down to you know, their whole levels.

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Speaker 1: So you know, you're talking about prices going up and

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Speaker 1: use the word euphoric. We came into this year pretty

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Speaker 1: bearish on high yield and leverage loans because of the

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Speaker 1: recession outlook, because of the rates outlook, because of all

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Speaker 1: the other pressures that we thought, and you know, everyone's

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Speaker 1: been calling for a distress cycle for a long long time,

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Speaker 1: and you know it seems to never happen. But why

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Speaker 1: are prices going up right now?

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Speaker 2: Well, they've been going up before this burst of new launches.

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Speaker 2: The last couple of weeks, they were going up because

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Speaker 2: we had basically no supply. So when colos are printed,

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Speaker 2: they have nowhere to go, so they have to buy

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Speaker 2: in the secondary market, so more demand prices we're going high, higher,

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Speaker 2: meaning towards par. Right now, they're staying relatively steady, a

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Speaker 2: little bit under ninety five cents on the dollar. But

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Speaker 2: we now have a very full calendar of new issuance

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Speaker 2: over twenty four deals in the general primary market. So

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Speaker 2: I think we're seeing that level off a little bit,

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Speaker 2: so I think it actually came down a slight bit yesterday.

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Speaker 1: But even with that burst divisions we've seen I mean,

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Speaker 1: still on a year to date basis, the year has

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Speaker 1: been pretty slow, right, I mean, it's not much volume

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Speaker 1: so far this year.

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Speaker 2: Now, volume has been clearly clearly down at least over

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Speaker 2: twenty percent over last year.

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Speaker 1: So you could see a lot more supply but still

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Speaker 1: be down on the year. Plus you've got what you know,

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Speaker 1: you've described the callateralized loan obligations to CLO. They buy

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Speaker 1: a lot of this stuff. We are now seeing kind

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Speaker 1: of a bit of a recovery in that too, and

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Speaker 1: we expect them to possibly come back, you know, quite

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Speaker 1: strongly in September. So you've got this demand for still

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Speaker 1: not love supply.

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Speaker 2: Right, I mean, what I think we will see in

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Speaker 2: September is some of this hung debt that has not

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Speaker 2: come forward to back to the market so to relaunch

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Speaker 2: for deals like possibly Bright Speed, maybe Twitter Elon Musk's

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Speaker 2: acquisition of Twitter, which has roughly thirteen billion dollars of

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Speaker 2: debt on the on the bank's bound sheets. So we

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Speaker 2: may see some of that come out post labor day.

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Speaker 1: Okay, but do you kind of think prices could still

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Speaker 1: keep going up even though you'll get more supply.

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Speaker 2: Okay, So what would keep the prices moving in the

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Speaker 2: direction towards par would be if the FED decides to

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Speaker 2: halt any further rate hikes, if equities continue to perform

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Speaker 2: as they are, if companies performance also improves, and ratings

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Speaker 2: upgrades will also help the index go higher. Things that

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Speaker 2: could bring it down would be some of this hung

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Speaker 2: debt that also will be coming out still at steep discounts.

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Speaker 2: So then you'll have a flood of that coming in

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Speaker 2: for example, you know it could be in a ninety range.

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Speaker 2: You know, some of it we shall see.

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Speaker 1: When we started a lot of big thanks for calling

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Speaker 1: for a default rate that was quite high in leverage loans.

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Speaker 1: These companies, you know, they have a lot of floating debt.

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Speaker 1: As you say, fundamentally, they'll be more tested by the

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Speaker 1: big rate move. It costs them a lot more to

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Speaker 1: service that debt. Won't there be more distress and defaults?

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Speaker 2: I mean there can be for the companies that cannot

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Speaker 2: handle where their interest expenses right now. So you know,

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Speaker 2: given you know where software is and where the margins

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Speaker 2: are right now, that may be too much for companies

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Speaker 2: that are already let's say rated B three and maybe

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Speaker 2: have had felt some of the issues of a recession

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Speaker 2: looming and their businesses can't handle that. So we could

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Speaker 2: see some, we could see some. But you know, again,

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Speaker 2: in a one point four trillion dollars the amount of

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Speaker 2: default is minimal.

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Speaker 1: So it's not a huge part of the market, right.

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Speaker 2: And that's why it's also so attractive. So here you have,

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Speaker 2: even though it's called junk loans, your returns are just

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Speaker 2: hovering under eight percent.

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Speaker 1: You know, how long have you been looking at this market?

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Speaker 2: For?

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Speaker 1: How many years?

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Speaker 2: I have been in this market since the early nineties.

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Speaker 1: And how many times in that period have you heard regulators?

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Speaker 1: Have you heard all sorts of people on the sideline

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Speaker 1: say this is a scary market, stay away.

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Speaker 2: A gazillion times?

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Speaker 1: And why is it there? Always? That's always fascinated me that,

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Speaker 1: you know, they talk about clo is blowing up, they

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Speaker 1: talk about leverage loans blowing up, but it never happens.

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Speaker 2: It never happens. I just think because the product is one,

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Speaker 2: it's a necessity. Because again, every every mom and pop

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Speaker 2: shop to large public companies, to infrastructure, to other oil

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Speaker 2: and gas companies. They all need leverage loans.

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Speaker 1: The other big topic that I wanted to hit very briefly,

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Speaker 1: private debt. You know that it's loans directly from from

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Speaker 1: a lender to a to a borough. We used to

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Speaker 1: call them bilaterals a long time ago, but now it's

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Speaker 1: private debt. How does that work with leverage loans? Does

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Speaker 1: it take over the business? Does it encroach? Does it

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Speaker 1: is it cannibalizing or is it living side by side

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Speaker 1: in perfect harmonies?

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Speaker 2: You think, well, I won't say necessarily perfect harmony, but

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Speaker 2: they have they have money to put to work. It's

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Speaker 2: they had stepped in on a couple of deals to

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Speaker 2: sort of do a bridge when our BSL broadly syndicated

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Speaker 2: lown market was not as exuberant. And then we've even

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Speaker 2: seeing deals where okay, they come, it's almost like a

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Speaker 2: band aid, and they come and supply the money so

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Speaker 2: the company could do the acquisition, and then later they

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Speaker 2: bring it to the banks, so they have a role

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Speaker 2: for sure. And and does it make it a little

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Speaker 2: more competitive definitely, So it's not like it's the business

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Speaker 2: can just go to those bankers who underwrite and do

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Speaker 2: the committed debt for all these buyout deals and acquisition deals,

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Speaker 2: and you know, now they have competition. But as far

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Speaker 2: as I have heard from my sources, private credit is

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Speaker 2: actually bringing their prices down sort of sort of to

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Speaker 2: compete more with the BSL market.

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Speaker 1: Interesting. So before we to Mary ellen Olsen at Bloomberg Intelligence,

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Speaker 1: what's the next big thing to watch out for here? Janine,

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Speaker 1: I mean, based on your experience, based on the knowledge

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Speaker 1: of these markets, are you kind of more optimistic or

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Speaker 1: more pessimistic about the rest of this year.

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Speaker 2: I'm actually optimistic. We have seen deals in the last

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Speaker 2: few weeks come out for repricing of deals, so cutting

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Speaker 2: the margins. We have seen companies that are strong pulling

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Speaker 2: dividends out. We are expecting a deal this week and

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Speaker 2: next week to launch for ten Ago, which was one

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Speaker 2: of the hung debt deals, and it all seems to

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Speaker 2: be going well. Many deals are tightening at least three

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Speaker 2: times upsizing and clearing out and pricing. So we only

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Speaker 2: have a few weeks left of summer unfortunately, but I

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Speaker 2: would say we're going to see some deals come the

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Speaker 2: hung debt come and pull labor day and once that

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Speaker 2: clears out, I think it's leading the path to more

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Speaker 2: M and A and so what I'd be looking for

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Speaker 2: is the building of M and A. I could come

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Speaker 2: to the debt markets in the fourth quarter, it could

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Speaker 2: maybe later in the fourth quarter, but I'd be looking

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Speaker 2: for towards twenty twenty four.

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Speaker 1: Great stuff. Janine Amadevo from Bloomberg News, Thank you so

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Speaker 1: much for joining us. Thank you for having me read

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Speaker 1: all of janine' scoops on the Bloomberg terminal and of

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Speaker 1: course at Bloomberg dot com. So, as I mentioned earlier,

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Speaker 1: we're delighted to welcome back on credit Edge Mary Ellen Olsen,

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Speaker 1: who covers commodities for Bloomberg Intelligence based in Hong Kong.

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Speaker 1: How's it going, Mary Ellen?

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Speaker 3: Very good? Thank you so much for having me back

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Speaker 3: again today.

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Speaker 1: So I know you cover a lot of different countries

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Speaker 1: and companies, but I wanted to focus on Indonesia and

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Speaker 1: in particular the high yield sector there. Let's start with nickel.

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Speaker 1: It's a key component of electric vehicle batteries. Indonesia as

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Speaker 1: a big producer of the metal. Why is the sector

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Speaker 1: in focus right now?

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Speaker 3: I think the sector is in focus baker as there

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Speaker 3: is more and more investment opportunities. Just this year, we've

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Speaker 3: seen one high yield bond issuance from Nickel Industries, which

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Speaker 3: is a nickel producer operating in Indonesia, and we've also

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Speaker 3: had a couple nickel IPOs. So I think what you're

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Speaker 3: seeing here is investors response to the government's regulatory policy,

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Speaker 3: which is encouraging downstream processing, especially in nickel and copper

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Speaker 3: and other metals.

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Speaker 1: You talk about the regulation, I mean you've written actually

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Speaker 1: about what you call resource nationalism. That doesn't usually sound

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Speaker 1: good for investors. What's the situation in Indonesia.

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Speaker 3: I think in Indonesia, what's been happening with some of

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Speaker 3: the companies is that some of the export bands and

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Speaker 3: downstream processing requirements have actually enabled the build out of infrastructure,

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Speaker 3: which is going to bring in new investment in new

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Speaker 3: opportunities over the long term. So in a way, I

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Speaker 3: see it as beneficial. I think that there has been

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Speaker 3: some criticism about some of the export bands from agencies

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Speaker 3: like the WTO, but it's really targeted at, you know,

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Speaker 3: bringing the added value on shore to Indonesia, and I

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Speaker 3: think it will lead to more investment opportunities for people

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Speaker 3: over time.

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Speaker 1: Okay, but for foreign investors. That doesn't usually work out

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Speaker 1: particularly well, and why is there an opportunity do you

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Speaker 1: think in Indonesia.

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Speaker 3: In Indonesia, what we're seeing is a lot of the

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Speaker 3: companies that are operating there are are domestic companies, so

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Speaker 3: they do have you know, they're in the loop in

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Speaker 3: terms of right now helping to build out this EV

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Speaker 3: supply chain especially, and it's interesting to see that with,

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Speaker 3: for example, the coal mining companies, which you do have

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Speaker 3: majority ownership by domestic entities, and what we're seeing is

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Speaker 3: that they're trying to put some stance between themselves being

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Speaker 3: predominantly driven by coal revenues and they're diversifying to support

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Speaker 3: the EV supply chain. So we have a Darro Energy

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Speaker 3: that's looking at building an aluminum smelter and also looking

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Speaker 3: at building a hydro electric plant to support the smelter,

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Speaker 3: you know, within a certain period of time. And then

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Speaker 3: we have another cool company in Dica Energy, which is

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Speaker 3: actually opening up a business that focuses on the two

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Speaker 3: wheel EV motorcycle. So they've actually you know, come out

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Speaker 3: with some new motorcycle models and they're really trying to

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Speaker 3: invest in what they see as a more green and

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Speaker 3: sustainable business so I think that that's kind of the

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Speaker 3: path that these companies are going down because they're trying

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Speaker 3: to transition to participate in the new energy EV supply chain.

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Speaker 1: So that all sounds great if you're in Indonesia and

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Speaker 1: you're an Indonesian company. But if I'm a credit investor,

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Speaker 1: you know, an international credit investor sitting in New York

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Speaker 1: or Hong Kong, why sorry, or London, why should I

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Speaker 1: look at Indonesian commodities right now?

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Speaker 3: Again? Because I think they're attracting a lot of investment.

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Speaker 3: If you look at some of the new projects that

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Speaker 3: are coming in, they're quite big. We're seeing interest from

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Speaker 3: some of the major car makers to come in to

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Speaker 3: invest in some nickel assets to make sure that they

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Speaker 3: have the resources they need to sustain their business over

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Speaker 3: the long term. And Indonesia's nickel deposits they account for

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Speaker 3: about a quarter of the global reserves. So if nickel

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Speaker 3: is in demand, and certainly critical minerals are in growing

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Speaker 3: demand to support the EV supply chain and new energy,

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Speaker 3: you having assets in Indonesia could be a bonus.

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Speaker 1: And the companies that we're talking about here, I mean

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Speaker 1: you mentioned a few, but are they mostly companies that

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Speaker 1: fund in dollar bond markets.

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Speaker 3: It's a mix. I would say that in Indonesia you

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Speaker 3: do see some of the high yeal companies leaning on

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Speaker 3: US dollar borrowings as well as some local currency borrowings.

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Speaker 3: But we've seen what I've seen most recently is equity

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Speaker 3: equity raising. So in the two IPOs that just went out,

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Speaker 3: of course we're in Indonesian Rupia. For one of the

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Speaker 3: company's Nickel Industries, which is a company I just wrote

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Speaker 3: a b I focused the idea on, they actually attracted

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Speaker 3: funding from one of the domestic companies, United Tractors, also

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Speaker 3: through the equity market. So we're seeing a good mix

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Speaker 3: of funding. And I think the funding is not only

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Speaker 3: coming from onshore but also from offshore as well, because

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Speaker 3: Nickel Industries just did that four hundred million dollar bond

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Speaker 3: in April.

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Speaker 1: Okay, So again, if I'm sitting outside of Indonesia, outside Asia,

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Speaker 1: is there a liquid of debt that I could invest in?

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Speaker 3: Yes. Across the six companies that may be more focused

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Speaker 3: just on mining exclusively, there's about I think twelve billion

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Speaker 3: in dollar bonds outstanding. It really ranges from company to company.

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Speaker 3: Some of the well, probably the state back company, which

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Speaker 3: is mind ID, which is the holding company for the

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Speaker 3: state mining assets, that has the biggest amount of debt outstanding,

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Speaker 3: and probably the smallest would be Nickel Industries, which has

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Speaker 3: only about four hundred million. So it's a it's a

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Speaker 3: good chunk of change. But really, if you look at

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Speaker 3: some of the majors globally like valet or Rio Tinto,

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Speaker 3: they probably on a standalone basis would have seven billion

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Speaker 3: in dollar debt outstanding, So still still a lot of

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Speaker 3: room to grow. But yeah, I think that it's gaining

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Speaker 3: mass as we continue to see new companies trying to raise.

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Speaker 1: Money and all the yields more tracts of though.

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Speaker 3: Yes, definitely. I think that when you look at the

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Speaker 3: coal companies, so previously or historically, the major issuers have

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Speaker 3: been the coal companies, and they've always traded wide simply

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Speaker 3: because they have, you know, the mounting coal risks and

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Speaker 3: ESG concerns, So even within the high yield category, they've

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Speaker 3: tended to trade quite wide to their peer group. So yeah,

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Speaker 3: YELD in the high yield sector, I think Indonesian high

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Speaker 3: YELD definitely trades wide to what you would get overseas.

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Speaker 3: And I was looking at that before the podcast. And

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Speaker 3: it's interesting for let's say Indeka Energy. At Daro Energy,

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Speaker 3: they have bonds due in twenty twenty four and they're

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Speaker 3: yielding over seven percent. So for a double B minus

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Speaker 3: US dollar corporate bond, it's it's below seven percent. It's

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Speaker 3: about six and a half percent at the moment at

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Speaker 3: the one year mark. So yeah, they're yielding yielding more.

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Speaker 3: And I think that those bonds for the coals have

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Speaker 3: come in a lot recently simply because they've the core

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Speaker 3: prices have been so high and they've been able to

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Speaker 3: amass such a great amount of cash on their balance sheet,

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Speaker 3: which has helped them reduce some of the refinancing risks.

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Speaker 1: So the room to films are rarely further do you

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Speaker 1: think from here?

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Speaker 3: I think so. The bonds are still trading a little

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Speaker 3: bit below par, so you could see some upside for

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Speaker 3: them as they close it on maturity, especially since the

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Speaker 3: maturity is only a year away. And certainly for a Daro.

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Speaker 3: A Daro is actually a it has a triple B

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Speaker 3: minus rating from Fitch and it's still offering a a

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Speaker 3: yield in excess of seven percent, and it had at

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Speaker 3: the end of December or at the end of March

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Speaker 3: it had about three billion in cash and its balance

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Speaker 3: shape so it definitely has limited relative to about seven

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Speaker 3: hundred and fifty million of bonds outstanding, So you know,

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Speaker 3: it seems as though they're liquid enough and you know,

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Speaker 3: to support that bond repayment within a year's time.

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Speaker 1: Cool though, I mean, I know it's perform though, But

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Speaker 1: isn't that sort of a dying business and everyone wants

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Speaker 1: to get out because as you mentioned, the ESG risk

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Speaker 1: is quite high.

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Speaker 3: You know, I think it's a transitioning business. I wouldn't

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Speaker 3: be surprised to see less refinancing in the dollar bond market.

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Speaker 3: But I'm certainly seeing a lot of companies right now

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Speaker 3: looking to acquire coal assets, whether they're an Indian steel

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Speaker 3: company or there's another Indonesia company that is a coal

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Speaker 3: service and contractor Booma, which is looking at some of

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Speaker 3: the BHP assets in Australia. So I'm not sure exactly

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Speaker 3: how those assets are going to be financed going forward,

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Speaker 3: but there is an interest among players to still acquire

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Speaker 3: those assets. And you've got to remember in Indonesia, I

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Speaker 3: think that you know the majority of their power generation

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Speaker 3: is coming from coal fired assets. Still, it'll take a

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Speaker 3: while for that to go It'll take a while for

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Speaker 3: that to kind of go away.

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Speaker 1: Yeah, on the on the flip side of the nickel thing,

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Speaker 1: I mean that plays into the ev story, which is

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Speaker 1: such a hot theme, and it does kind of play

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Speaker 1: into the the E and the ESG. Is there a

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Speaker 1: lot of upside in those bones? Do you think the

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Speaker 1: nickel side.

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Speaker 3: Yeah, it's a it's a single B B plus B

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Speaker 3: one rated credit. So obviously that's at the lower end

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Speaker 3: of the high yield spectrum. So it does, you know,

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Speaker 3: indicate that there's more risk in a bond like that

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Speaker 3: which deserves a higher yield, so relative to its it's peers,

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Speaker 3: I still think it looks a little bit wide and

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Speaker 3: can close the gap. And in the story I just

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Speaker 3: published a couple a couple of days ago, what I

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Speaker 3: highlight as for the catalysts are really the fact that

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Speaker 3: it has been able to tap the debt markets, it's

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Speaker 3: been able to bring in new equity, and it's really

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Speaker 3: pivoting to focus on the electric vehicle supply chain with

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Speaker 3: its production rather than selling into the stainless steel markets.

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Speaker 1: And so when you sort of step back and look

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Speaker 1: at all the things you're covering, and I know you

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Speaker 1: have quite a broad coverage area. How does Indonesian high

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Speaker 1: yield sort of fit into that. Is it the big

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Speaker 1: opportunity right now or is it just one of many.

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Speaker 3: Well, what we're seeing is I'm seeing more interest in Indonesia,

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Speaker 3: I think because of what's been happening in the Chinese

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Speaker 3: property market. So people are looking to diversify their portfolios

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Speaker 3: a little bit more away maybe from the Chinese high yield,

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Speaker 3: which you know, has had a lot of challenges this year,

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Speaker 3: and of course it's been limited for them because most

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Speaker 3: of the exposure in my sectors has been through the

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Speaker 3: coal companies, which do have esgu related concerns. So now

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Speaker 3: that there's this transition that is happening, I think that

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Speaker 3: it does open the door for more people to invest

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Speaker 3: in this space, especially you know, if they can come

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Speaker 3: through and actually come through with some sustainable products that

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Speaker 3: you know are green, you know, I think that that

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Speaker 3: is definitely going to bring more investors in.

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Speaker 1: Right, Okay, when I've got to ask allso Mary, and

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Speaker 1: last time we spoke, an Indian company called the Danta

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Speaker 1: was on your radar. They were in a bit of

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Speaker 1: trouble what's the latest there is there? Is it all

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Speaker 1: sorted out now? Are there any problems on the horizon

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Speaker 1: yet not to worry about? Still?

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Speaker 3: Well, yeah, that I think there's still some liquidity concerns

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Speaker 3: for the Danta. They have a dollar bond coming due

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Speaker 3: in January, so they still haven't really completely closed the

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Speaker 3: funding gap as I see it through you know, through

439
00:25:36,960 --> 00:25:38,920
Speaker 3: the end of March, they're still going to need to

440
00:25:39,560 --> 00:25:44,600
Speaker 3: raise some additional funds and the fundraising still remains relatively

441
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Speaker 3: slow and the information remains relatively thin. So I think

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Speaker 3: I think with Vedanta, it's the January bond. They just

443
00:25:53,280 --> 00:25:57,040
Speaker 3: extended a intercompany loan which should provide them with some

444
00:25:57,160 --> 00:26:01,920
Speaker 3: liquidity to to funnel towards that. They've been increasing their

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00:26:01,960 --> 00:26:06,919
Speaker 3: brand fees, and there was a rumor that potentially they

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00:26:07,000 --> 00:26:12,560
Speaker 3: could use some future brand fees as security against some

447
00:26:12,680 --> 00:26:14,720
Speaker 3: new debt that they could potentially raise, which would bring

448
00:26:14,760 --> 00:26:18,240
Speaker 3: in liquidity. But at the moment, there's been nothing concrete

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00:26:18,240 --> 00:26:22,600
Speaker 3: that's happened there, so it's still evolving. And at the

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00:26:22,600 --> 00:26:24,600
Speaker 3: same time, we're hearing a lot from the company about

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00:26:24,640 --> 00:26:27,679
Speaker 3: the chip factory that it wants to open up and

452
00:26:27,720 --> 00:26:29,680
Speaker 3: some of the investments there, so there's still a lot

453
00:26:29,680 --> 00:26:35,160
Speaker 3: of unanswered details and a quite still a big maturity

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Speaker 3: wall the coming years.

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Speaker 1: Thanks very much, Mary and Neilson of Bloomberg Intelligence. You

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Speaker 1: can read all her great analysis on the Bloomberg Terminal.

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Speaker 1: Do check it out and hope to see you back

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Speaker 1: on the show soon.

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Speaker 3: Mary Ellen, thanks for having me.

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Speaker 1: And thanks again to Janine Amadeo from Bloomberg News. Read

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Speaker 1: all of her great credit scoops on the Terminal and

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Speaker 1: at Bloomberg dot Com. I'm James Crombie. It's been a

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Speaker 1: pleasure having you join us again next week on the

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Speaker 1: Credit Edge.