Speaker 1: Hello, and welcome to The Credit Edge, a weekly markets podcast.
Speaker 1: My name is James Crombie. I'm a senior editor at Bloomberg.
Speaker 1: This week, we're very pleased to have on the show
Speaker 1: Janine A. Mordeo, who covers loans for Bloomberg News in
Speaker 1: New York.
Speaker 2: How are you, Janine, I'm well, James, thank you and
Speaker 2: good morning. Thank you for having me on today.
Speaker 1: Very excited to get your take on the markets. We're
Speaker 1: also delighted to see Mary Ellen Olson, who looks at
Speaker 1: commodities for Bloomberg Intelligence in Hong Kong. We'll be coming
Speaker 1: back to Mary Ellen a bit later in the show
Speaker 1: to talk about Indonesian high yield companies and electric vehicles.
Speaker 1: So do stay with us. But first, Janine Amadeo with
Speaker 1: Bloomberg News, you're the zen master of loans, one of
Speaker 1: my very favorite markets to cover. We've been working together
Speaker 1: for more than a decade. We were in the market
Speaker 1: on the cell side for quite a while before that,
Speaker 1: so we're really delighted to have you on the show.
Speaker 2: Thank you.
Speaker 1: Leverage loans it's a one point four trillion roughly dollar market.
Speaker 1: It's the best performing part of credit this year with
Speaker 1: gains almost eight percent, making this I think the best
Speaker 1: year since two thousand and nine, so it really does
Speaker 1: stand out. But I'm just kind of when you get
Speaker 1: a sense for you to start off, gie, what's the
Speaker 1: tone right now in the leverage loan market?
Speaker 2: Right now, we're actually having a euphoric risk one period.
Speaker 2: It had been quiet for a while when we've had
Speaker 2: some more concerns about FED raid hikes, but since there
Speaker 2: is news that they may pause, the equity markets have
Speaker 2: been soaring and doing quite well this year, and leverage
Speaker 2: loans have gone in tandem with that.
Speaker 1: So just for the people that don't know this market
Speaker 1: very well, I mean, what is a leverage loan? How
Speaker 1: do they work? Break it down for us a bit
Speaker 1: of course.
Speaker 2: So leverage loans are loans that are too sub investment
Speaker 2: grade companies. Generally, it could be for any company, even
Speaker 2: in your neighborhood. It could be, you know, a lumber plant,
Speaker 2: it could be a tire company. And how they're structured,
Speaker 2: they are generally speaking, seven years non amortizing that are
Speaker 2: bought by collateralized loan obligations who are the biggest buyers
Speaker 2: of this product, and they trade and some.
Speaker 1: Of them pretty big, right you've get talking about you know,
Speaker 1: tens of billions of dollars in some cases billions.
Speaker 2: Sometimes they could be a fifty million dollar add on,
Speaker 2: you know, to all equal to one point four trillion
Speaker 2: dollar total asset classes.
Speaker 1: And even though you've talked about high yield and you
Speaker 1: know that sort of implies risk, they are sort of
Speaker 1: household names in lots of cases. I mean, there are
Speaker 1: companies in there that we recognize from the.
Speaker 2: Right, Like we recently had a deal for Carnival Cruise
Speaker 2: Lines that came back in Carnival Corp. There's SeaWorld just
Speaker 2: did a repricing. So yes, very large. Some public companies.
Speaker 2: Many of these companies and leverage loans are companies that
Speaker 2: were bought out by private equity, so leverage buyouts, and
Speaker 2: that makes up a big portion of leverage loans M
Speaker 2: and A.
Speaker 1: So from the investor side, why would investors like them
Speaker 1: in a rising rate environment?
Speaker 2: Well, right now, the benchmark rate is called sour and
Speaker 2: it's a floating rate. We had library before, but we
Speaker 2: transition to sour, and in a rising rate environment, your
Speaker 2: benchmark rate is increasing. So the way lenders make money
Speaker 2: is the benchmark rate plus the margin plus a credit
Speaker 2: spread adjustment now for live or as well as receiving
Speaker 2: the loans at a discount generally and so under par.
Speaker 2: And so in this environment where rates have been rising,
Speaker 2: lenders are then earning more interest income.
Speaker 1: And have the margins also been increasing.
Speaker 2: The margins have been increasing. We had a difficult period
Speaker 2: of time back in twenty twenty two when we had
Speaker 2: a ton of hung debt, which is debt for deals
Speaker 2: that were closed before they were sold, to the tune
Speaker 2: of something like forty billion dollars. So after that, prices
Speaker 2: in general moved up for margins and discounts.
Speaker 1: And just to go back to that hung debt point
Speaker 1: which you raised, I mean, we're going to come back
Speaker 1: to that in a bit. But hung debt basically, as
Speaker 1: I understand it, banks are agreeing to lend money to
Speaker 1: companies and they kind of lock in a rate. But
Speaker 1: then the market changes, so you know, banks typically sell
Speaker 1: this stuff onto other investors, right, and then when the
Speaker 1: market suddenly changes, banks end up holding it and they're
Speaker 1: not they don't actually want to hold it, but they
Speaker 1: end up with it on their balance sheet.
Speaker 2: Exactly, so they're holding it on their balance sheet. A
Speaker 2: lot of that actually has been whittled down since the
Speaker 2: beginning of the year as we've been in a more
Speaker 2: risk gone mode, and deals like Nielsen Citrix have basically
Speaker 2: sold down to you know, their whole levels.
Speaker 1: So you know, you're talking about prices going up and
Speaker 1: use the word euphoric. We came into this year pretty
Speaker 1: bearish on high yield and leverage loans because of the
Speaker 1: recession outlook, because of the rates outlook, because of all
Speaker 1: the other pressures that we thought, and you know, everyone's
Speaker 1: been calling for a distress cycle for a long long time,
Speaker 1: and you know it seems to never happen. But why
Speaker 1: are prices going up right now?
Speaker 2: Well, they've been going up before this burst of new launches.
Speaker 2: The last couple of weeks, they were going up because
Speaker 2: we had basically no supply. So when colos are printed,
Speaker 2: they have nowhere to go, so they have to buy
Speaker 2: in the secondary market, so more demand prices we're going high, higher,
Speaker 2: meaning towards par. Right now, they're staying relatively steady, a
Speaker 2: little bit under ninety five cents on the dollar. But
Speaker 2: we now have a very full calendar of new issuance
Speaker 2: over twenty four deals in the general primary market. So
Speaker 2: I think we're seeing that level off a little bit,
Speaker 2: so I think it actually came down a slight bit yesterday.
Speaker 1: But even with that burst divisions we've seen I mean,
Speaker 1: still on a year to date basis, the year has
Speaker 1: been pretty slow, right, I mean, it's not much volume
Speaker 1: so far this year.
Speaker 2: Now, volume has been clearly clearly down at least over
Speaker 2: twenty percent over last year.
Speaker 1: So you could see a lot more supply but still
Speaker 1: be down on the year. Plus you've got what you know,
Speaker 1: you've described the callateralized loan obligations to CLO. They buy
Speaker 1: a lot of this stuff. We are now seeing kind
Speaker 1: of a bit of a recovery in that too, and
Speaker 1: we expect them to possibly come back, you know, quite
Speaker 1: strongly in September. So you've got this demand for still
Speaker 1: not love supply.
Speaker 2: Right, I mean, what I think we will see in
Speaker 2: September is some of this hung debt that has not
Speaker 2: come forward to back to the market so to relaunch
Speaker 2: for deals like possibly Bright Speed, maybe Twitter Elon Musk's
Speaker 2: acquisition of Twitter, which has roughly thirteen billion dollars of
Speaker 2: debt on the on the bank's bound sheets. So we
Speaker 2: may see some of that come out post labor day.
Speaker 1: Okay, but do you kind of think prices could still
Speaker 1: keep going up even though you'll get more supply.
Speaker 2: Okay, So what would keep the prices moving in the
Speaker 2: direction towards par would be if the FED decides to
Speaker 2: halt any further rate hikes, if equities continue to perform
Speaker 2: as they are, if companies performance also improves, and ratings
Speaker 2: upgrades will also help the index go higher. Things that
Speaker 2: could bring it down would be some of this hung
Speaker 2: debt that also will be coming out still at steep discounts.
Speaker 2: So then you'll have a flood of that coming in
Speaker 2: for example, you know it could be in a ninety range.
Speaker 2: You know, some of it we shall see.
Speaker 1: When we started a lot of big thanks for calling
Speaker 1: for a default rate that was quite high in leverage loans.
Speaker 1: These companies, you know, they have a lot of floating debt.
Speaker 1: As you say, fundamentally, they'll be more tested by the
Speaker 1: big rate move. It costs them a lot more to
Speaker 1: service that debt. Won't there be more distress and defaults?
Speaker 2: I mean there can be for the companies that cannot
Speaker 2: handle where their interest expenses right now. So you know,
Speaker 2: given you know where software is and where the margins
Speaker 2: are right now, that may be too much for companies
Speaker 2: that are already let's say rated B three and maybe
Speaker 2: have had felt some of the issues of a recession
Speaker 2: looming and their businesses can't handle that. So we could
Speaker 2: see some, we could see some. But you know, again,
Speaker 2: in a one point four trillion dollars the amount of
Speaker 2: default is minimal.
Speaker 1: So it's not a huge part of the market, right.
Speaker 2: And that's why it's also so attractive. So here you have,
Speaker 2: even though it's called junk loans, your returns are just
Speaker 2: hovering under eight percent.
Speaker 1: You know, how long have you been looking at this market?
Speaker 2: For?
Speaker 1: How many years?
Speaker 2: I have been in this market since the early nineties.
Speaker 1: And how many times in that period have you heard regulators?
Speaker 1: Have you heard all sorts of people on the sideline
Speaker 1: say this is a scary market, stay away.
Speaker 2: A gazillion times?
Speaker 1: And why is it there? Always? That's always fascinated me that,
Speaker 1: you know, they talk about clo is blowing up, they
Speaker 1: talk about leverage loans blowing up, but it never happens.
Speaker 2: It never happens. I just think because the product is one,
Speaker 2: it's a necessity. Because again, every every mom and pop
Speaker 2: shop to large public companies, to infrastructure, to other oil
Speaker 2: and gas companies. They all need leverage loans.
Speaker 1: The other big topic that I wanted to hit very briefly,
Speaker 1: private debt. You know that it's loans directly from from
Speaker 1: a lender to a to a borough. We used to
Speaker 1: call them bilaterals a long time ago, but now it's
Speaker 1: private debt. How does that work with leverage loans? Does
Speaker 1: it take over the business? Does it encroach? Does it
Speaker 1: is it cannibalizing or is it living side by side
Speaker 1: in perfect harmonies?
Speaker 2: You think, well, I won't say necessarily perfect harmony, but
Speaker 2: they have they have money to put to work. It's
Speaker 2: they had stepped in on a couple of deals to
Speaker 2: sort of do a bridge when our BSL broadly syndicated
Speaker 2: lown market was not as exuberant. And then we've even
Speaker 2: seeing deals where okay, they come, it's almost like a
Speaker 2: band aid, and they come and supply the money so
Speaker 2: the company could do the acquisition, and then later they
Speaker 2: bring it to the banks, so they have a role
Speaker 2: for sure. And and does it make it a little
Speaker 2: more competitive definitely, So it's not like it's the business
Speaker 2: can just go to those bankers who underwrite and do
Speaker 2: the committed debt for all these buyout deals and acquisition deals,
Speaker 2: and you know, now they have competition. But as far
Speaker 2: as I have heard from my sources, private credit is
Speaker 2: actually bringing their prices down sort of sort of to
Speaker 2: compete more with the BSL market.
Speaker 1: Interesting. So before we to Mary ellen Olsen at Bloomberg Intelligence,
Speaker 1: what's the next big thing to watch out for here? Janine,
Speaker 1: I mean, based on your experience, based on the knowledge
Speaker 1: of these markets, are you kind of more optimistic or
Speaker 1: more pessimistic about the rest of this year.
Speaker 2: I'm actually optimistic. We have seen deals in the last
Speaker 2: few weeks come out for repricing of deals, so cutting
Speaker 2: the margins. We have seen companies that are strong pulling
Speaker 2: dividends out. We are expecting a deal this week and
Speaker 2: next week to launch for ten Ago, which was one
Speaker 2: of the hung debt deals, and it all seems to
Speaker 2: be going well. Many deals are tightening at least three
Speaker 2: times upsizing and clearing out and pricing. So we only
Speaker 2: have a few weeks left of summer unfortunately, but I
Speaker 2: would say we're going to see some deals come the
Speaker 2: hung debt come and pull labor day and once that
Speaker 2: clears out, I think it's leading the path to more
Speaker 2: M and A and so what I'd be looking for
Speaker 2: is the building of M and A. I could come
Speaker 2: to the debt markets in the fourth quarter, it could
Speaker 2: maybe later in the fourth quarter, but I'd be looking
Speaker 2: for towards twenty twenty four.
Speaker 1: Great stuff. Janine Amadevo from Bloomberg News, Thank you so
Speaker 1: much for joining us. Thank you for having me read
Speaker 1: all of janine' scoops on the Bloomberg terminal and of
Speaker 1: course at Bloomberg dot com. So, as I mentioned earlier,
Speaker 1: we're delighted to welcome back on credit Edge Mary Ellen Olsen,
Speaker 1: who covers commodities for Bloomberg Intelligence based in Hong Kong.
Speaker 1: How's it going, Mary Ellen?
Speaker 3: Very good? Thank you so much for having me back
Speaker 3: again today.
Speaker 1: So I know you cover a lot of different countries
Speaker 1: and companies, but I wanted to focus on Indonesia and
Speaker 1: in particular the high yield sector there. Let's start with nickel.
Speaker 1: It's a key component of electric vehicle batteries. Indonesia as
Speaker 1: a big producer of the metal. Why is the sector
Speaker 1: in focus right now?
Speaker 3: I think the sector is in focus baker as there
Speaker 3: is more and more investment opportunities. Just this year, we've
Speaker 3: seen one high yield bond issuance from Nickel Industries, which
Speaker 3: is a nickel producer operating in Indonesia, and we've also
Speaker 3: had a couple nickel IPOs. So I think what you're
Speaker 3: seeing here is investors response to the government's regulatory policy,
Speaker 3: which is encouraging downstream processing, especially in nickel and copper
Speaker 3: and other metals.
Speaker 1: You talk about the regulation, I mean you've written actually
Speaker 1: about what you call resource nationalism. That doesn't usually sound
Speaker 1: good for investors. What's the situation in Indonesia.
Speaker 3: I think in Indonesia, what's been happening with some of
Speaker 3: the companies is that some of the export bands and
Speaker 3: downstream processing requirements have actually enabled the build out of infrastructure,
Speaker 3: which is going to bring in new investment in new
Speaker 3: opportunities over the long term. So in a way, I
Speaker 3: see it as beneficial. I think that there has been
Speaker 3: some criticism about some of the export bands from agencies
Speaker 3: like the WTO, but it's really targeted at, you know,
Speaker 3: bringing the added value on shore to Indonesia, and I
Speaker 3: think it will lead to more investment opportunities for people
Speaker 3: over time.
Speaker 1: Okay, but for foreign investors. That doesn't usually work out
Speaker 1: particularly well, and why is there an opportunity do you
Speaker 1: think in Indonesia.
Speaker 3: In Indonesia, what we're seeing is a lot of the
Speaker 3: companies that are operating there are are domestic companies, so
Speaker 3: they do have you know, they're in the loop in
Speaker 3: terms of right now helping to build out this EV
Speaker 3: supply chain especially, and it's interesting to see that with,
Speaker 3: for example, the coal mining companies, which you do have
Speaker 3: majority ownership by domestic entities, and what we're seeing is
Speaker 3: that they're trying to put some stance between themselves being
Speaker 3: predominantly driven by coal revenues and they're diversifying to support
Speaker 3: the EV supply chain. So we have a Darro Energy
Speaker 3: that's looking at building an aluminum smelter and also looking
Speaker 3: at building a hydro electric plant to support the smelter,
Speaker 3: you know, within a certain period of time. And then
Speaker 3: we have another cool company in Dica Energy, which is
Speaker 3: actually opening up a business that focuses on the two
Speaker 3: wheel EV motorcycle. So they've actually you know, come out
Speaker 3: with some new motorcycle models and they're really trying to
Speaker 3: invest in what they see as a more green and
Speaker 3: sustainable business so I think that that's kind of the
Speaker 3: path that these companies are going down because they're trying
Speaker 3: to transition to participate in the new energy EV supply chain.
Speaker 1: So that all sounds great if you're in Indonesia and
Speaker 1: you're an Indonesian company. But if I'm a credit investor,
Speaker 1: you know, an international credit investor sitting in New York
Speaker 1: or Hong Kong, why sorry, or London, why should I
Speaker 1: look at Indonesian commodities right now?
Speaker 3: Again? Because I think they're attracting a lot of investment.
Speaker 3: If you look at some of the new projects that
Speaker 3: are coming in, they're quite big. We're seeing interest from
Speaker 3: some of the major car makers to come in to
Speaker 3: invest in some nickel assets to make sure that they
Speaker 3: have the resources they need to sustain their business over
Speaker 3: the long term. And Indonesia's nickel deposits they account for
Speaker 3: about a quarter of the global reserves. So if nickel
Speaker 3: is in demand, and certainly critical minerals are in growing
Speaker 3: demand to support the EV supply chain and new energy,
Speaker 3: you having assets in Indonesia could be a bonus.
Speaker 1: And the companies that we're talking about here, I mean
Speaker 1: you mentioned a few, but are they mostly companies that
Speaker 1: fund in dollar bond markets.
Speaker 3: It's a mix. I would say that in Indonesia you
Speaker 3: do see some of the high yeal companies leaning on
Speaker 3: US dollar borrowings as well as some local currency borrowings.
Speaker 3: But we've seen what I've seen most recently is equity
Speaker 3: equity raising. So in the two IPOs that just went out,
Speaker 3: of course we're in Indonesian Rupia. For one of the
Speaker 3: company's Nickel Industries, which is a company I just wrote
Speaker 3: a b I focused the idea on, they actually attracted
Speaker 3: funding from one of the domestic companies, United Tractors, also
Speaker 3: through the equity market. So we're seeing a good mix
Speaker 3: of funding. And I think the funding is not only
Speaker 3: coming from onshore but also from offshore as well, because
Speaker 3: Nickel Industries just did that four hundred million dollar bond
Speaker 3: in April.
Speaker 1: Okay, So again, if I'm sitting outside of Indonesia, outside Asia,
Speaker 1: is there a liquid of debt that I could invest in?
Speaker 3: Yes. Across the six companies that may be more focused
Speaker 3: just on mining exclusively, there's about I think twelve billion
Speaker 3: in dollar bonds outstanding. It really ranges from company to company.
Speaker 3: Some of the well, probably the state back company, which
Speaker 3: is mind ID, which is the holding company for the
Speaker 3: state mining assets, that has the biggest amount of debt outstanding,
Speaker 3: and probably the smallest would be Nickel Industries, which has
Speaker 3: only about four hundred million. So it's a it's a
Speaker 3: good chunk of change. But really, if you look at
Speaker 3: some of the majors globally like valet or Rio Tinto,
Speaker 3: they probably on a standalone basis would have seven billion
Speaker 3: in dollar debt outstanding, So still still a lot of
Speaker 3: room to grow. But yeah, I think that it's gaining
Speaker 3: mass as we continue to see new companies trying to raise.
Speaker 1: Money and all the yields more tracts of though.
Speaker 3: Yes, definitely. I think that when you look at the
Speaker 3: coal companies, so previously or historically, the major issuers have
Speaker 3: been the coal companies, and they've always traded wide simply
Speaker 3: because they have, you know, the mounting coal risks and
Speaker 3: ESG concerns, So even within the high yield category, they've
Speaker 3: tended to trade quite wide to their peer group. So yeah,
Speaker 3: YELD in the high yield sector, I think Indonesian high
Speaker 3: YELD definitely trades wide to what you would get overseas.
Speaker 3: And I was looking at that before the podcast. And
Speaker 3: it's interesting for let's say Indeka Energy. At Daro Energy,
Speaker 3: they have bonds due in twenty twenty four and they're
Speaker 3: yielding over seven percent. So for a double B minus
Speaker 3: US dollar corporate bond, it's it's below seven percent. It's
Speaker 3: about six and a half percent at the moment at
Speaker 3: the one year mark. So yeah, they're yielding yielding more.
Speaker 3: And I think that those bonds for the coals have
Speaker 3: come in a lot recently simply because they've the core
Speaker 3: prices have been so high and they've been able to
Speaker 3: amass such a great amount of cash on their balance sheet,
Speaker 3: which has helped them reduce some of the refinancing risks.
Speaker 1: So the room to films are rarely further do you
Speaker 1: think from here?
Speaker 3: I think so. The bonds are still trading a little
Speaker 3: bit below par, so you could see some upside for
Speaker 3: them as they close it on maturity, especially since the
Speaker 3: maturity is only a year away. And certainly for a Daro.
Speaker 3: A Daro is actually a it has a triple B
Speaker 3: minus rating from Fitch and it's still offering a a
Speaker 3: yield in excess of seven percent, and it had at
Speaker 3: the end of December or at the end of March
Speaker 3: it had about three billion in cash and its balance
Speaker 3: shape so it definitely has limited relative to about seven
Speaker 3: hundred and fifty million of bonds outstanding, So you know,
Speaker 3: it seems as though they're liquid enough and you know,
Speaker 3: to support that bond repayment within a year's time.
Speaker 1: Cool though, I mean, I know it's perform though, But
Speaker 1: isn't that sort of a dying business and everyone wants
Speaker 1: to get out because as you mentioned, the ESG risk
Speaker 1: is quite high.
Speaker 3: You know, I think it's a transitioning business. I wouldn't
Speaker 3: be surprised to see less refinancing in the dollar bond market.
Speaker 3: But I'm certainly seeing a lot of companies right now
Speaker 3: looking to acquire coal assets, whether they're an Indian steel
Speaker 3: company or there's another Indonesia company that is a coal
Speaker 3: service and contractor Booma, which is looking at some of
Speaker 3: the BHP assets in Australia. So I'm not sure exactly
Speaker 3: how those assets are going to be financed going forward,
Speaker 3: but there is an interest among players to still acquire
Speaker 3: those assets. And you've got to remember in Indonesia, I
Speaker 3: think that you know the majority of their power generation
Speaker 3: is coming from coal fired assets. Still, it'll take a
Speaker 3: while for that to go It'll take a while for
Speaker 3: that to kind of go away.
Speaker 1: Yeah, on the on the flip side of the nickel thing,
Speaker 1: I mean that plays into the ev story, which is
Speaker 1: such a hot theme, and it does kind of play
Speaker 1: into the the E and the ESG. Is there a
Speaker 1: lot of upside in those bones? Do you think the
Speaker 1: nickel side.
Speaker 3: Yeah, it's a it's a single B B plus B
Speaker 3: one rated credit. So obviously that's at the lower end
Speaker 3: of the high yield spectrum. So it does, you know,
Speaker 3: indicate that there's more risk in a bond like that
Speaker 3: which deserves a higher yield, so relative to its it's peers,
Speaker 3: I still think it looks a little bit wide and
Speaker 3: can close the gap. And in the story I just
Speaker 3: published a couple a couple of days ago, what I
Speaker 3: highlight as for the catalysts are really the fact that
Speaker 3: it has been able to tap the debt markets, it's
Speaker 3: been able to bring in new equity, and it's really
Speaker 3: pivoting to focus on the electric vehicle supply chain with
Speaker 3: its production rather than selling into the stainless steel markets.
Speaker 1: And so when you sort of step back and look
Speaker 1: at all the things you're covering, and I know you
Speaker 1: have quite a broad coverage area. How does Indonesian high
Speaker 1: yield sort of fit into that. Is it the big
Speaker 1: opportunity right now or is it just one of many.
Speaker 3: Well, what we're seeing is I'm seeing more interest in Indonesia,
Speaker 3: I think because of what's been happening in the Chinese
Speaker 3: property market. So people are looking to diversify their portfolios
Speaker 3: a little bit more away maybe from the Chinese high yield,
Speaker 3: which you know, has had a lot of challenges this year,
Speaker 3: and of course it's been limited for them because most
Speaker 3: of the exposure in my sectors has been through the
Speaker 3: coal companies, which do have esgu related concerns. So now
Speaker 3: that there's this transition that is happening, I think that
Speaker 3: it does open the door for more people to invest
Speaker 3: in this space, especially you know, if they can come
Speaker 3: through and actually come through with some sustainable products that
Speaker 3: you know are green, you know, I think that that
Speaker 3: is definitely going to bring more investors in.
Speaker 1: Right, Okay, when I've got to ask allso Mary, and
Speaker 1: last time we spoke, an Indian company called the Danta
Speaker 1: was on your radar. They were in a bit of
Speaker 1: trouble what's the latest there is there? Is it all
Speaker 1: sorted out now? Are there any problems on the horizon
Speaker 1: yet not to worry about? Still?
Speaker 3: Well, yeah, that I think there's still some liquidity concerns
Speaker 3: for the Danta. They have a dollar bond coming due
Speaker 3: in January, so they still haven't really completely closed the
Speaker 3: funding gap as I see it through you know, through
Speaker 3: the end of March, they're still going to need to
Speaker 3: raise some additional funds and the fundraising still remains relatively
Speaker 3: slow and the information remains relatively thin. So I think
Speaker 3: I think with Vedanta, it's the January bond. They just
Speaker 3: extended a intercompany loan which should provide them with some
Speaker 3: liquidity to to funnel towards that. They've been increasing their
Speaker 3: brand fees, and there was a rumor that potentially they
Speaker 3: could use some future brand fees as security against some
Speaker 3: new debt that they could potentially raise, which would bring
Speaker 3: in liquidity. But at the moment, there's been nothing concrete
Speaker 3: that's happened there, so it's still evolving. And at the
Speaker 3: same time, we're hearing a lot from the company about
Speaker 3: the chip factory that it wants to open up and
Speaker 3: some of the investments there, so there's still a lot
Speaker 3: of unanswered details and a quite still a big maturity
Speaker 3: wall the coming years.
Speaker 1: Thanks very much, Mary and Neilson of Bloomberg Intelligence. You
Speaker 1: can read all her great analysis on the Bloomberg Terminal.
Speaker 1: Do check it out and hope to see you back
Speaker 1: on the show soon.
Speaker 3: Mary Ellen, thanks for having me.
Speaker 1: And thanks again to Janine Amadeo from Bloomberg News. Read
Speaker 1: all of her great credit scoops on the Terminal and
Speaker 1: at Bloomberg dot Com. I'm James Crombie. It's been a
Speaker 1: pleasure having you join us again next week on the
Speaker 1: Credit Edge.