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Speaker 1: Hello, and welcome to the Credit Edge Weekly Markets Podcast.

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

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Speaker 2: And I'm Tolu Alamutu, a senior analyst at Bloomberg Intelligence.

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Speaker 2: This week, we are very pleased to welcome Tom mauld

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Speaker 2: who is senior portfolio manager of investment grade Debt at

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Speaker 2: RBC Blue Bay Asset Management. How are you Tom?

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Speaker 3: Very good, Thank you, Jail. It's great to be.

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Speaker 2: Here, great, thank you for joining us. Tom's focus is

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Speaker 2: on European non sovereign debt. He manages Blue Bay's European

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Speaker 2: corporate strategy, including a flagship mutual fund and several bespoke mandates.

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Speaker 2: Tom joined Blue Bay Asset Management in December two thousand

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Speaker 2: and five and the investment grade team in July two

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Speaker 2: thousand and seven. Blue Bay is of course now part

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Speaker 2: of RBC Global Asset Management, where the total AUM exceeds

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Speaker 2: half a trillion dollars.

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Speaker 4: Tom has been instrumental.

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Speaker 2: In driving the success of the European id credit strategy,

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Speaker 2: both in absolute return and benchmark portfolios.

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Speaker 1: Over to you, James, delighted to have you Tom. Just

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Speaker 1: to set the scene a bit here before we get

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Speaker 1: to the questions. Credit markets are hot, with bond spreads

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Speaker 1: at the titles in twenty seven years, as demand saws

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Speaker 1: and net new supply remains thin. Elevated US political and

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Speaker 1: macro risk has pushed global credit investors into other markets,

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Speaker 1: especially Europe, to diversify portfolios, but that brings its own

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Speaker 1: challenges also political. Just look at all the volatility in

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Speaker 1: the UK brance and Holland Plus says the trade war

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Speaker 1: to contend with, and countries across the region have to

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Speaker 1: significantly boost their defense spending. Globally, in credit markets, we

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Speaker 1: are seeing more distress, default and bankruptcy, but you wouldn't

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Speaker 1: know it looking at the price. So Tom break it

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Speaker 1: down for us, how do you position yourself in these markets?

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Speaker 1: Given elevated volatility, rising macro risk, turbulent geopolitics, but also

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Speaker 1: very tight credit spreads.

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Speaker 3: Hi ja Yeah, I mean, when you paint the pits,

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Speaker 3: you've just painted it.

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Speaker 5: It makes it very hard to kind of come back

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Speaker 5: with what I would call it a positive view. I mean,

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Speaker 5: it's unquestionable that you were at a point where credit

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Speaker 5: spreads are extremely tight and there are a whole host

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Speaker 5: of risks out there, and we've been probably running the

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Speaker 5: lowest level of credit risks that we have done for

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Speaker 5: for quite some time in various products. The opportunity set

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Speaker 5: to take kind of big beata positions, you know, clearly

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Speaker 5: just isn't.

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Speaker 3: There at the moment.

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Speaker 5: And if it wasn't for the kind of positive tail

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Speaker 5: winds impacting credit asset classes in terms of demand and supply,

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Speaker 5: which have obviously been incredibly strong and really fueled fueled

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Speaker 5: credit market spreads. Getting to these sorts of levels, you know,

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Speaker 5: one would be definitely thinking about maybe taking an even

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Speaker 5: more defensive stance, But just in the kind of short

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Speaker 5: to medium term, you know, it feels like some of

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Speaker 5: these conditions which have pushed credit markets to where they

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Speaker 5: are are still in place and aren't necessarily going to

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Speaker 5: meaningfully change anytime soon despite the risks. So you know,

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Speaker 5: we can definitely see a bit of a pick up

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Speaker 5: in volatility, but at this point in time, you know,

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Speaker 5: running a beta close to home. But you know, focusing

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Speaker 5: I mean, it's probably a bit of a boring thing

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Speaker 5: to say, but focusing on our for opportunities I think

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Speaker 5: is more appropriate.

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Speaker 3: And I think what's been interesting, particularly.

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Speaker 5: Kind of in the second half of last year and

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Speaker 5: this year is I think those opportunities have become a

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Speaker 5: lot more prevalent. You know, you're seeing a bit more

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Speaker 5: dispersion in credit asset classes, despite the fact that you're

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Speaker 5: at very tight spreads, not all completely boring.

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Speaker 3: I think there's some quite interesting things to play for.

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Speaker 5: Still.

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Speaker 2: One of the things that you mentioned is staying away.

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Speaker 2: I guess from the lowest level of credit risk, what

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Speaker 2: does that look like for you in terms of your positioning.

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Speaker 2: Does it mean that there's nothing there at all in

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Speaker 2: terms of you know, the lower part of from grade

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Speaker 2: and maybe high yield, or does it mean that you're

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Speaker 2: much more selective in terms of sectors and names and

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Speaker 2: so on.

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Speaker 5: Yeah, it's much more about being selective, because I think

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Speaker 5: when you're in this kind of environment, if you believe

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Speaker 5: that spreads that are kind of going to stay where

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Speaker 5: they are, let's say, you know, investment grade spreads at

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Speaker 5: the kind of levels that we've got to, you know,

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Speaker 5: the longer that you stay there, you're automatically going to

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Speaker 5: see some compression.

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Speaker 3: And obviously the.

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Speaker 5: Last kind of part of this moving credit has been

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Speaker 5: people reaching for the kind of wider things which they

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Speaker 5: consider safe. So I think it's important too that's an

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Speaker 5: important part of decision making when certainly investing on alongside

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Speaker 5: at this point, looking for things which have some value

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Speaker 5: that are a bit wider, that are a bit further

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Speaker 5: down the credit spectrum, you know, in within investment grade.

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Speaker 5: It's obvious to look at the things like subordinated financials

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Speaker 5: and corporate hybrids. I think overall a lot of those

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Speaker 5: parts of the market have actually you know, got quite tight,

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Speaker 5: but there are still you know, really interesting situations and issuers.

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Speaker 5: So as you say, being selective, you know, really very

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Speaker 5: much is the key, and I think, like I said,

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Speaker 5: I think it's been working actually a lot better more recently.

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Speaker 3: If I jump back a few years and.

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Speaker 5: Think about when when investment grades spreads were as tight

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Speaker 5: as this in the kind of CSPP you know, ECB

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Speaker 5: buying period, I feel like there was a lot less

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Speaker 5: dispersion and a lot less kind of maybe differentiation between

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Speaker 5: the kind of slightly higher beta parts of the credit

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Speaker 5: market and the lower beat than there is now. So

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Speaker 5: perhaps a bit more interesting, you know, a more interesting

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Speaker 5: playing field still and definitely room for lower parts of

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Speaker 5: the credit spectrum.

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Speaker 1: What we keep hearing, though, Tom, is that it doesn't

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Speaker 1: matter what the spread is it's all about the yield.

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Speaker 1: Yields are very high and the Fed's about to cut,

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Speaker 1: so you know, those high yields, those high coupons, they

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Speaker 1: are going to be there for long. So just buy

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Speaker 1: as much as you possibly can right now. Why not

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Speaker 1: follow that strategy?

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Speaker 5: Yeah, I mean, look, I think I think some people

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Speaker 5: are following that strategy, which is what which is kind

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Speaker 5: of kind.

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Speaker 3: Of where we are, you know, why we are where

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Speaker 3: we are? You know, I think in.

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Speaker 5: There's no doubt there's been a big pick up in

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Speaker 5: the type of products which are very yield focused. We

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Speaker 5: keep hearing about these fixed maturity funds, you know, which

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Speaker 5: are kind of either targeting certain durations, targeting certain maturities,

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Speaker 5: which are trying to lock in yields, and you know,

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Speaker 5: they're they're kind of indiscriminate buyers of credit focused on yield. So,

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Speaker 5: you know, I think that's where it can be a

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Speaker 5: bit dangerous and obviously you need I think it's where

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Speaker 5: you need to be a bit more kind of careful

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Speaker 5: from the research side. And obviously you can't be an

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Speaker 5: indiscriminate buyer. You have to make sure that you're buying

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Speaker 5: things that if they are at the wider end of

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Speaker 5: the spectrum that you're you know, you're very sure you've

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Speaker 5: done a credit research on and so, and obviously you know,

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Speaker 5: as as an active manager on the credit side, we

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Speaker 5: kind of pride ourselves in being good at that.

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Speaker 3: It's more important now than ever.

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Speaker 2: One of the areas that you mentioned which has piqued

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Speaker 2: my interest anyway, has been subordinated financials and corporate hybrids,

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Speaker 2: obviously relatively high beta compared to the sort of higher

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Speaker 2: ranking parts of issuers capital structures and so on. One issue

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Speaker 2: that I've had anyway looking at some of the corporate

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Speaker 2: hybrids in real estate has been that you've seen prices

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Speaker 2: go up even on securities that are not even pain anymore.

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Speaker 2: And our news colleagues as well as our BI colleagues

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Speaker 2: have been writing about what's happening in the additional tier

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Speaker 2: one market and how basically valuations are not what they

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Speaker 2: used to.

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Speaker 4: Be a couple of years ago.

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Speaker 2: So how are you viewing that part of the market now,

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Speaker 2: especially that we're given that we're seeing more and more issuance,

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Speaker 2: at least on the eighty one side.

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Speaker 4: Do you still think that there's value?

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Speaker 2: And as James said, you should just look at yield

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Speaker 2: or do you think that spreads have come in a

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Speaker 2: little bit too much.

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Speaker 5: On the financial side, it's still relatively interesting. I mean, yes,

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Speaker 5: spreads have moved a long way. You're much tighter spreads

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Speaker 5: that we've been at before. There's been a lot of compression.

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Speaker 5: I think the overall yields that you can get in

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Speaker 5: financials are still quite attractive. I mean, even in senior space.

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Speaker 5: You know, some people are arguing that financials versus non

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Speaker 5: financials for example, has compressed too much. But actually, if

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Speaker 5: you look back over a really long period of history,

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Speaker 5: you know, it's not unusual for financial senior spreads to

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Speaker 5: trade meaningfully inside non financial spreads. And I think where

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Speaker 5: we are now, after an incredibly long period of regulation

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Speaker 5: and improvement in fundamentals in the finance, you know, in

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Speaker 5: particularly in European financials, where profitabilities as good as it's

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Speaker 5: been an incredibly long time, it's not you know, it's

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Speaker 5: not difficult to imagine why we are here and why

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Speaker 5: we can't actually even maybe go go slightly inside. If

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Speaker 5: I think about comparing some of the kind of senior

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Speaker 5: senior non preferred financial spreads versus kind of almost like

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Speaker 5: cyclical industrials, and you know that them being at similar levels,

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Speaker 5: I think I rather be on the financial side then

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Speaker 5: moving into the kind of more subordinated space. You know,

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Speaker 5: I think if you kind of follow that theory that

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Speaker 5: actually financial is fundamentally in a very good place, and

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Speaker 5: look at the kind of yields and spreads that you

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Speaker 5: can still still attain in the subordinated financial space, whether

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Speaker 5: that's lower tier two or eighter one, there's still some

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Speaker 5: you know, interesting opportunities there. I think, provided your you know,

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Speaker 5: selective and you know, careful in your kind of credit work,

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Speaker 5: it's still a really good place to allocate your investments.

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Speaker 5: On the corporate hybrid side, I think it's you know,

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Speaker 5: there's probably a few more different you know, we could

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Speaker 5: probably have a whole podcast on corporate on corporate hybrids,

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Speaker 5: I think, particularly if we start talking about real estate

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Speaker 5: corporate hybrids, which are almost an entirely separate topic on

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Speaker 5: their own, I think, you know, that's that's somewhere where

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Speaker 5: I think you need to be particularly careful right now.

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Speaker 5: I mean, you know that you know, you've had a

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Speaker 5: you know, twenty twenty two created such a dramatic move

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Speaker 5: across the real estate space and clearly a lot of

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Speaker 5: the real estate companies that had issued corporate hybrids in

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Speaker 5: hindsight probably looking back, thinking they rather that they hadn't.

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Speaker 3: You know, the price action was it was extreme.

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Speaker 5: And obviously there are situations now where previously investment investment

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Speaker 5: great companies have hybrids outstanding where they're not paying coupons,

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Speaker 5: et cetera. So I think there's an incredible amount to

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Speaker 5: in that space. You need to be incredibly selective. I mean,

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Speaker 5: I think at this point in time, having had such

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Speaker 5: a big move tighter following twenty twenty two, for me,

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Speaker 5: I feel quite defensive on the real estate space, particularly

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Speaker 5: because my view is that there are tailwinds for Europe

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Speaker 5: European economy that will put pressure on interest rates, I

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Speaker 5: pressure upward pressure on interest rates, and you know, we've

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Speaker 5: seen time and time again over history that that doesn't

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Speaker 5: go too well for the real estate space. And having

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Speaker 5: you know, rallied back to what I would kind of

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Speaker 5: consider a fair value, I'd be a bit more defensive.

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Speaker 3: And then in other corporate hybrids. It's a very long

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Speaker 3: answer to.

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Speaker 2: Your question, but again.

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Speaker 5: You have the kind of bit of dispersion there. I mean,

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Speaker 5: there's you know, you have some very cyclical names. In

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Speaker 5: corporate hybrids, you have some very safe names. I would

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Speaker 5: argue that the kind of safer utility, like certainly I

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Speaker 5: G rated corporate hybrids trade extremely tight at the moment,

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Speaker 5: and you know, are very expensive. I think the opportunity

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Speaker 5: set there is very limited, and so you are having

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Speaker 5: to like go into maybe the more the stories with

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Speaker 5: a little bit of should we call it hair on

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Speaker 5: them to maybe gain some value.

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Speaker 3: And I still think there's you know that that's.

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Speaker 5: Actually where you can get some some some interesting, some

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Speaker 5: interesting value for your money within the hybrid space. So

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Speaker 5: in all of these kinds of areas, you know that

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Speaker 5: the name of the game is is definitely being selective

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Speaker 5: at the moment.

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Speaker 4: Yeah, and I agree with that.

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Speaker 2: But one of the there's a lot I want to

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Speaker 2: sort of go into from what you've touched on there,

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Speaker 2: Thank you. But the first thing I was going to

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Speaker 2: touch on is on financials and the effect of government interference,

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Speaker 2: if we want to call it that. So we've seen

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Speaker 2: some reports saying that there might be some sort of

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Speaker 2: special tax levied in the UK on banks which has

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Speaker 2: affected the equities, maybe not so much credit. Is that

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Speaker 2: a concern for you when you're looking at additional Tier

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Speaker 2: one or other financials instruments, whether it's seen in a

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Speaker 2: nonpreferred or the more junior stuff, maybe we start with that.

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Speaker 2: Are you concerned about government intervention?

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Speaker 5: Yeah, I mean I think you've always got a factor

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Speaker 5: that in and I think you know within financials that

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Speaker 5: I think the areas right now where you'd be a

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Speaker 5: little bit more cautious is the UK, where obviously the

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Speaker 5: UK does not feel in such a great place, and

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Speaker 5: the spill over into financial institutions and banks could definitely

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Speaker 5: be prevalent. So I think that warrants a bit more caution.

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Speaker 5: And I think the other obvious area is, you know,

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Speaker 5: within Europe is obviously France. I mean there's no doubt

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Speaker 5: that within banks, the you know, the kind of link

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Speaker 5: between how the solign behaves and how banks tend to

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Speaker 5: behaving credit is very strong. And so at this point

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Speaker 5: in time, looking down the barrel of kind of French volatility,

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Speaker 5: you know, akin to what we saw last year, got

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Speaker 5: a kind of factor that into what's going on in

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Speaker 5: French banks. But you know, French banks do trade wider

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Speaker 5: than I would say there they're kind of non French counterparts,

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Speaker 5: so there is some value there. So you could argue

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Speaker 5: that to some degree, there's some pricing in of that

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Speaker 5: volatility premium that we may well see in the coming weeks.

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Speaker 5: And I guess the other thing that I would kind

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Speaker 5: of anecdotally highlight is it feels quite clear that people

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Speaker 5: are more defensive already on French banks. So for example,

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Speaker 5: you know, in the last couple of weeks, when you

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Speaker 5: started seeing a bit more volatility in French assets, you know,

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Speaker 5: French banks obviously went wider. They were probably the biggest

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Speaker 5: underperformer out of the French you know, out of the

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Speaker 5: French assets in European credit. But at the same time,

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Speaker 5: you know, what we actually saw in the market was

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Speaker 5: people trying to buy those bonds pretty quickly on that

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Speaker 5: small backup, which kind of shows you that people probably

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Speaker 5: are underweight. There are speculative accounts that are already short by.

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Speaker 5: People are a bit more prepared this time round. You know,

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Speaker 5: last year, when you sort of suddenly moved into this

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Speaker 5: period of you know, the focus on French politics, it

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Speaker 5: was slightly out of left field, and I think people

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Speaker 5: were more taken by surprise and it created much bigger

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Speaker 5: moves in credit, So I think this time round it's

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Speaker 5: going to be quite interesting to kind of see how

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Speaker 5: how that you know, how that plays out.

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Speaker 3: You know, if you're in a scenario.

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Speaker 5: Where you know, BEAVU loses the loses the confidence vote,

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Speaker 5: which clearly seems fairly likely, but there is you know,

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Speaker 5: potentially a move to put another technocrat in place, you

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Speaker 5: could see French spreads calming down incredibly quickly. But on

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Speaker 5: the other hand, you know, if there are snap elections

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Speaker 5: and you know we're already seeing that, you know, some

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Speaker 5: of the more extreme parties have gained popularity, I think

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Speaker 5: that's going to be a point where you do see

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Speaker 5: a big pickup in volatility in European spreads in general,

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Speaker 5: and that will be concentrated in certainly and in French

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Speaker 5: banks and French domicile corporates to some degree as well.

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Speaker 2: Yeah, there's definitely lots to discuss, I think, and we'll

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Speaker 2: definitely come to that in terms of the outlook for

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Speaker 2: French issuers, and maybe we'll even touch on some of

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Speaker 2: the Dutch issuers as well, given their political challenges there too.

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Speaker 2: But before we get on to that, you did mention

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Speaker 2: earlier what's going on in the real estate sector with hybrids,

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Speaker 2: and the fact that some issuers started off twenty twenty

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Speaker 2: three I think as an investment grade and they are

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Speaker 2: no longer there, to say the least, some.

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Speaker 4: Of them are even triple seen now. And I would

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Speaker 4: tend to agree that some.

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Speaker 2: Of those secues are looking fairish valued now. But one risk,

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Speaker 2: I guess maybe that you have further liability management like

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Speaker 2: buybacks and so on. Do you see that as a risk,

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Speaker 2: And also do you think that we need to give

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Speaker 2: more weight to some of the transformation programs that are

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Speaker 2: coming up. But some of these real estate entities, for instance,

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Speaker 2: we've had one entity that is no longer investment grade

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Speaker 2: but now has a new shareholder that's willing to put

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Speaker 2: more money in and so on. So there's those sorts

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Speaker 2: of moves as well that I guess could mean you

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Speaker 2: see another bump up in valuations. Is that something that

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Speaker 2: you think is a risk in terms of seeing it

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Speaker 2: as fair value or not?

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Speaker 4: Really?

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Speaker 3: I think some of those situations are are very likely

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Speaker 3: to happen.

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Speaker 5: In the kind of the names that have perhaps fallen

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Speaker 5: from grace quite far. I think one of the things

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Speaker 5: that you've seen since twenty twenty two is actually you know,

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Speaker 5: some very clever financial engineering by some of the real

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Speaker 5: estate guys where the reason some of the IG spreads

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Speaker 5: you know, went to eight hundred over in twenty twenty

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Speaker 5: two because it's because the market participants didn't think that

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Speaker 5: the levers would be available for these guys to pull

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Speaker 5: renegotiate the terms of their outstanding debt, you know, to

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Speaker 5: extend maturities that they would effectively be you know, falling

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Speaker 5: into a potential default scenario very quickly. And I think

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Speaker 5: it's been really fascinating to see the ability of some

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Speaker 5: of these guys to be on the front foot and

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Speaker 5: how much actual access to liquidity that they did have.

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Speaker 5: Some of the things that you're probably alluding to were

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Speaker 5: very clever, you know, people doing hybrid exchanges for example,

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Speaker 5: enabling them to you know, kind of slightly under the radar,

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Speaker 5: extend you know, be quite investor friendly, extend their maturities,

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Speaker 5: extend their call dates, and put themselves in the position

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Speaker 5: where they are actually able to wear the storm. So

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Speaker 5: and I think you know that I think this is

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Speaker 5: still going to happen. It's clearly on the table, particularly

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Speaker 5: now that we're in a scenario where yes, rates are

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Speaker 5: a bit high, but obviously the market feels a lot better,

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Speaker 5: and so people are willing to lend to these guys,

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Speaker 5: particularly if they have good, good assets. So I would

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Speaker 5: be you know, I guess the point of the question

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Speaker 5: and the point of the answer is I'd be quite

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Speaker 5: cautious on being you know, let's say outright short. For example,

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Speaker 5: in the kind of high the high yield names that

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Speaker 5: have come already come back from the brink. Yes they're

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Speaker 5: high yield, but they've still got very wide spreads, because

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Speaker 5: I think these sorts of leavers are very much on

359
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Speaker 5: the table for these guys still, and they probably will

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Speaker 5: continue to muddle through and maybe get themselves into a

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Speaker 5: back into a better position. I think where the opportunity

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Speaker 5: perhaps to be more defensive is better is in the

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Speaker 5: names that are still ig that have come all the

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Speaker 5: way back to the kind of spread level that they

365
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Speaker 5: were at pre twenty twenty two. So you could very

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Speaker 5: much argue that that's a fair value spread level, you know,

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Speaker 5: in this environment where now you've had two or three

368
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Speaker 5: years of higher rates, you know, you know, their average

369
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Speaker 5: cost of funding is just naturally going to keep going up.

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Speaker 3: And I think.

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Speaker 5: Particularly for some of the issuers where their actual kind

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Speaker 5: of ability to grow as a company is very limited.

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Speaker 5: You know, for example, in Germany residential it's very very

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Speaker 5: difficult to kind of actually get any rental growth there.

375
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Speaker 5: So let's say you've got two or three percent rental growth,

376
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Speaker 5: but your cost of funding, you know, is kind of

377
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Speaker 5: a four percent over time. It's just a bit of

378
00:19:37,520 --> 00:19:40,160
Speaker 5: an attrition for these guys. And you know, I think

379
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Speaker 5: that's where there's just an interesting relative value argument to

380
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Speaker 5: make to zoom.

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Speaker 1: Out Tom a little bit, just look globally at the

382
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Speaker 1: credit landscape. You know, since April, you know, the idea

383
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Speaker 1: of American exceptionalism has really been tested and has been

384
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Speaker 1: more and more questioned as we get into questions of

385
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Speaker 1: you know, fed independence and governance all that stuff. So

386
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Speaker 1: there was a big kneeja reaction to, Okay, well everyone

387
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Speaker 1: needs to diversify because we're so long the US and

388
00:20:06,840 --> 00:20:08,359
Speaker 1: we need to start looking at other places and or

389
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Speaker 1: look Europe. That makes sense, Let's get into Europe and

390
00:20:11,720 --> 00:20:16,320
Speaker 1: then now you know, hitting the the challenges of scale

391
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Speaker 1: of complexity of you know, all of the different jurisdictions

392
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Speaker 1: and languages and everything else. And now the political situation,

393
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Speaker 1: how does it look relative value wise Europe against the

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Speaker 1: US for you?

395
00:20:27,480 --> 00:20:30,639
Speaker 5: For me, it's a theme that I was pretty keenly

396
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Speaker 5: focused on from the kind of beginning of last year.

397
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Speaker 5: Really so I think, I know, it was much more

398
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Speaker 5: obvious theme then because at that point you had, you know,

399
00:20:39,080 --> 00:20:41,720
Speaker 5: if you were just like looking at European credit spreads

400
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Speaker 5: versus versus the US, you know, within investment grade and

401
00:20:45,520 --> 00:20:48,159
Speaker 5: you know, to some degree, within high yield, Europe looked cheaper.

402
00:20:49,040 --> 00:20:51,479
Speaker 5: And there are a number of reasons for that, you know,

403
00:20:51,600 --> 00:20:54,960
Speaker 5: I think twenty twenty two was a period that really

404
00:20:55,080 --> 00:20:58,960
Speaker 5: kind of pushed that relationship, probably to a point where

405
00:20:59,240 --> 00:21:02,720
Speaker 5: it was slightly unfair. I mean, at the time, what

406
00:21:02,880 --> 00:21:04,800
Speaker 5: drove it there, I think was very relevant. You know,

407
00:21:04,840 --> 00:21:07,840
Speaker 5: you had, at the beginning of the Russia Ukraine conflict,

408
00:21:08,040 --> 00:21:10,800
Speaker 5: you had very high energy prices. The impact of those

409
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Speaker 5: energy prices on European companies was clearly a lot more acute.

410
00:21:14,400 --> 00:21:16,280
Speaker 5: You know, I think that was relatively justified. But in

411
00:21:16,320 --> 00:21:18,720
Speaker 5: the subsequent and a couple of years, you kind of

412
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Speaker 5: this relationship of Europe being wide the US kind of

413
00:21:21,880 --> 00:21:24,160
Speaker 5: remained in place for some time, and there's a number

414
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Speaker 5: of other kind of factors that kind of participated or

415
00:21:28,720 --> 00:21:31,120
Speaker 5: fueled that. But I think, you know, into twenty twenty four,

416
00:21:31,160 --> 00:21:33,560
Speaker 5: for me, it was much more like that relationship doesn't

417
00:21:33,560 --> 00:21:35,840
Speaker 5: really make sense. I think Europe should trade at least flat,

418
00:21:35,840 --> 00:21:38,720
Speaker 5: if not slightly inside the US, and as you came

419
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Speaker 5: into the end of the year, that's kind of played out.

420
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Speaker 5: So now now we're kind of sitting with you know,

421
00:21:44,480 --> 00:21:46,960
Speaker 5: spreads pretty similar to each other. I mean, you could

422
00:21:47,000 --> 00:21:50,200
Speaker 5: make an argument that in Europe durations a bit lower,

423
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Speaker 5: so maybe the fair value slightly inside. I think you're

424
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Speaker 5: a bit fairer. I mean, I'm you know, I'm certainly

425
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Speaker 5: not going to push the US exceptionisms over.

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Speaker 3: You know, everything should be in Europe. I quite I

427
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Speaker 3: still have the I still quite like the bias.

428
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Speaker 5: I think the kind of dynamics on the two sides

429
00:22:07,800 --> 00:22:11,119
Speaker 5: of the Atlantic are a bit different. I think, you know,

430
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Speaker 5: in the US, it feels like you could be at

431
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Speaker 5: a point where you're obviously starting to see growth slow

432
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Speaker 5: down a little bit. There's a little bit of pressure

433
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Speaker 5: on the data, particularly on the labor side. You know,

434
00:22:20,800 --> 00:22:23,920
Speaker 5: people are obviously slightly concerned about that. I think in Europe,

435
00:22:24,119 --> 00:22:26,520
Speaker 5: to pick up in spending I mean, everybody's going to

436
00:22:26,520 --> 00:22:28,560
Speaker 5: be talking about this, but it's thin it. I think

437
00:22:28,600 --> 00:22:31,760
Speaker 5: it's quite relevant. I think the magnitude of the fiscal

438
00:22:31,840 --> 00:22:35,720
Speaker 5: impulse of what's coming, I think perhaps people still even underestimate.

439
00:22:35,760 --> 00:22:37,080
Speaker 5: And I think one of the things I'd be a

440
00:22:37,119 --> 00:22:39,520
Speaker 5: bit concerned about is, I mean, you're seeing it even

441
00:22:39,560 --> 00:22:42,120
Speaker 5: in the last few days, rates going up a bit

442
00:22:42,160 --> 00:22:47,040
Speaker 5: more quickly. I think, you know, you could have a

443
00:22:47,160 --> 00:22:47,640
Speaker 5: that theme.

444
00:22:47,720 --> 00:22:49,639
Speaker 3: Could you could see it a bit more prevalently.

445
00:22:49,720 --> 00:22:51,199
Speaker 5: I think, you know, rates going up a bit more

446
00:22:51,240 --> 00:22:53,919
Speaker 5: because people are saying, Okay, well, actually the fiscal is

447
00:22:53,920 --> 00:22:56,320
Speaker 5: going to be really quite powerful. It is going to

448
00:22:56,359 --> 00:23:00,000
Speaker 5: help growth, is going to mean that, you know, monetary policy.

449
00:23:00,080 --> 00:23:03,080
Speaker 5: He certainly isn't getting any lusive from here. So you

450
00:23:03,119 --> 00:23:08,399
Speaker 5: can see, you know, potentially steeper curves in Europe and

451
00:23:08,480 --> 00:23:11,080
Speaker 5: higher longer term rates. And that's something that I think

452
00:23:11,119 --> 00:23:13,040
Speaker 5: we have to factor in as investors.

453
00:23:13,480 --> 00:23:15,960
Speaker 1: Yeah, the big theme right now is defense spending in

454
00:23:16,000 --> 00:23:18,800
Speaker 1: Europe issuance to support that. Is that a good fit

455
00:23:18,840 --> 00:23:21,080
Speaker 1: for your strategies? And if so, where do you put it?

456
00:23:21,240 --> 00:23:22,760
Speaker 3: Yeah, I mean it's a difficult one.

457
00:23:23,000 --> 00:23:28,359
Speaker 5: Defense in European funds has always been quite hot, but

458
00:23:28,440 --> 00:23:30,080
Speaker 5: it's been a hot topic for for a long time.

459
00:23:30,119 --> 00:23:33,800
Speaker 5: I mean, a lot of European strategies, including the strategies

460
00:23:33,840 --> 00:23:36,919
Speaker 5: that we run here, obviously have quite a bit of

461
00:23:37,920 --> 00:23:42,800
Speaker 5: ESG ESG kind of rules baked into them. You know,

462
00:23:42,920 --> 00:23:48,159
Speaker 5: a lot of our flagship funds are articulate articulate defined

463
00:23:48,280 --> 00:23:51,840
Speaker 5: under the SFDR regulations.

464
00:23:51,200 --> 00:23:53,600
Speaker 3: And so we do have restrictions on defense.

465
00:23:53,680 --> 00:23:59,159
Speaker 5: We have some restrictions on certain aspects of controversial weapons

466
00:23:59,200 --> 00:24:00,720
Speaker 5: actually at the company level as well.

467
00:24:00,800 --> 00:24:02,880
Speaker 3: So from that perspective, there's.

468
00:24:02,720 --> 00:24:07,919
Speaker 5: Always a little bit of discussion in terms of, you know,

469
00:24:07,920 --> 00:24:12,120
Speaker 5: how we can capture this theme. It's clearly a very

470
00:24:12,520 --> 00:24:15,760
Speaker 5: interesting theme at the moment within Europe.

471
00:24:16,800 --> 00:24:17,879
Speaker 3: So there are some there.

472
00:24:17,720 --> 00:24:19,480
Speaker 5: Are some issues that I think a lot of European

473
00:24:19,520 --> 00:24:23,080
Speaker 5: asset managers just wouldn't be able to buy. And to

474
00:24:23,119 --> 00:24:26,320
Speaker 5: be fair, I don't necessarily think that's wrong because it's

475
00:24:26,080 --> 00:24:28,720
Speaker 5: the issuers that get singled out generally are the ones

476
00:24:28,760 --> 00:24:32,800
Speaker 5: that do manufacture controversial weapons. And I think one of

477
00:24:32,800 --> 00:24:35,880
Speaker 5: the things that's really difficult in this topic is it's

478
00:24:36,000 --> 00:24:38,640
Speaker 5: really important to work out, you know, for the issuers

479
00:24:38,640 --> 00:24:42,320
Speaker 5: that are in this sector, you know, where are they

480
00:24:42,359 --> 00:24:46,240
Speaker 5: selling their goods and services. And I think that's that's

481
00:24:46,280 --> 00:24:48,639
Speaker 5: where you know, there's a big debate whether should you

482
00:24:48,680 --> 00:24:51,080
Speaker 5: have blanket restrictions or should it be something that you

483
00:24:51,240 --> 00:24:56,359
Speaker 5: are able to decide on yoursels as an investor based

484
00:24:56,400 --> 00:24:58,680
Speaker 5: on your own research. I mean, at the moment, there

485
00:24:58,680 --> 00:25:01,280
Speaker 5: are these restrictions in place. Some of our fun you know,

486
00:25:01,320 --> 00:25:03,480
Speaker 5: some of the some of the strategies that Blue Bay

487
00:25:03,920 --> 00:25:08,160
Speaker 5: would would be restricted. And also within the credit space,

488
00:25:08,240 --> 00:25:12,120
Speaker 5: certainly within ig there's actually a fairly limited opportunity set

489
00:25:12,119 --> 00:25:14,879
Speaker 5: as well. There aren't a tremendous number of issuers that

490
00:25:15,000 --> 00:25:17,199
Speaker 5: focus on defense, and the ones that do focus on

491
00:25:17,240 --> 00:25:20,320
Speaker 5: defense actually tend to be quite high quality from a

492
00:25:20,359 --> 00:25:23,919
Speaker 5: credit from a credit rating perspective, let's say, and actually

493
00:25:23,920 --> 00:25:27,080
Speaker 5: do trade are quite expensive spreads already. I mean in

494
00:25:27,119 --> 00:25:29,480
Speaker 5: the US that's particularly true. You know, you can think

495
00:25:29,480 --> 00:25:32,399
Speaker 5: of a number of really interesting issuers that are clearly

496
00:25:32,400 --> 00:25:35,800
Speaker 5: going to very much benefit from from this kind of

497
00:25:35,840 --> 00:25:38,360
Speaker 5: spending coming out of Europe. But when you look at

498
00:25:38,560 --> 00:25:40,199
Speaker 5: you going sort of look at their bonds and you

499
00:25:40,240 --> 00:25:43,080
Speaker 5: think what can I include in my portfolios, you'd say

500
00:25:43,119 --> 00:25:46,480
Speaker 5: the opportunity set is actually generally quite limited. I think

501
00:25:46,520 --> 00:25:48,240
Speaker 5: it's actually, you know, I think it's going to change.

502
00:25:48,280 --> 00:25:50,439
Speaker 5: I mean, clearly, there's lots of spending coming in Europe.

503
00:25:50,480 --> 00:25:55,040
Speaker 5: It's going to catalyze a trend of people starting to

504
00:25:55,160 --> 00:25:58,239
Speaker 5: issue more bonds into public bond markets. It is what

505
00:25:58,280 --> 00:26:01,000
Speaker 5: people want to go to up. It is what people

506
00:26:01,080 --> 00:26:04,720
Speaker 5: are going to want to see, and I think managers

507
00:26:04,760 --> 00:26:07,320
Speaker 5: like us obviously have to have to have a little

508
00:26:07,320 --> 00:26:09,760
Speaker 5: bit of a look internally and kind of think about

509
00:26:09,840 --> 00:26:13,320
Speaker 5: our current rules and is there some you know, is

510
00:26:13,359 --> 00:26:15,520
Speaker 5: there a discussion to be had in terms of modifying

511
00:26:15,520 --> 00:26:18,280
Speaker 5: some of those rules, because you know, on the one side,

512
00:26:18,280 --> 00:26:21,040
Speaker 5: I've talked about you know, I think it's very important

513
00:26:21,080 --> 00:26:23,960
Speaker 5: to focus on the defense companies where they're selling their

514
00:26:24,000 --> 00:26:26,560
Speaker 5: goods and services. But on the other hand, you know,

515
00:26:26,560 --> 00:26:28,920
Speaker 5: if you think from a sustainability perspective, I think the

516
00:26:29,000 --> 00:26:30,879
Speaker 5: quote I heard the other day was, you know, you

517
00:26:30,920 --> 00:26:33,920
Speaker 5: can't be sustainable if you can't defend yourself, and say,

518
00:26:33,960 --> 00:26:35,720
Speaker 5: that's something I think we have to think.

519
00:26:35,600 --> 00:26:38,719
Speaker 1: About as well, because the whole sort of idea of

520
00:26:38,800 --> 00:26:41,080
Speaker 1: defense is kind of morph from you know, it's offensive,

521
00:26:41,160 --> 00:26:45,280
Speaker 1: it's attacking, to it's you know, defending your country or democracy.

522
00:26:45,320 --> 00:26:47,879
Speaker 1: It's a it's a great you know, it's an asset

523
00:26:48,200 --> 00:26:51,040
Speaker 1: and now we've got labeled issuance. There was there was

524
00:26:51,040 --> 00:26:53,200
Speaker 1: a very well bid deal last week. I don't know

525
00:26:53,240 --> 00:26:55,560
Speaker 1: if you participated, but it seems to come at a

526
00:26:55,560 --> 00:26:57,800
Speaker 1: pretty good level for investors in a you know, as

527
00:26:57,840 --> 00:27:00,880
Speaker 1: we've discussed a very tight credit so that there must

528
00:27:00,880 --> 00:27:03,359
Speaker 1: be a ton of opportunity. But I'm interested in what

529
00:27:03,400 --> 00:27:06,119
Speaker 1: you said about ESG because it's one topic that you know,

530
00:27:06,440 --> 00:27:08,640
Speaker 1: eighteen months ago everyone wanted to talk about it. Now

531
00:27:08,680 --> 00:27:11,760
Speaker 1: no one wants to talk about it. Really quite a

532
00:27:11,800 --> 00:27:16,200
Speaker 1: tricky one, but you are, you know, still excited about

533
00:27:16,240 --> 00:27:19,959
Speaker 1: the concept of impact investing. I'm interested in you know,

534
00:27:20,000 --> 00:27:22,600
Speaker 1: what that means to you and does it make you money?

535
00:27:25,080 --> 00:27:25,840
Speaker 3: For me, it's a.

536
00:27:25,800 --> 00:27:30,560
Speaker 5: Really it's a really fascinating topic, you know, ESG investing,

537
00:27:30,640 --> 00:27:35,360
Speaker 5: impact investing, and I think ultimately it's something that it's

538
00:27:35,440 --> 00:27:38,200
Speaker 5: still really relevant. I mean, it's obviously very relevant in Europe.

539
00:27:38,240 --> 00:27:41,159
Speaker 5: You know that there has been quite a bit of

540
00:27:41,520 --> 00:27:44,040
Speaker 5: sentiment shift in the last kind of few years, I

541
00:27:44,040 --> 00:27:47,880
Speaker 5: think globally when it comes to ESG, but I think

542
00:27:47,880 --> 00:27:51,760
Speaker 5: we're still in a place where ESG is extremely important.

543
00:27:52,200 --> 00:27:56,520
Speaker 5: I think focusing on ESG as part of your investment

544
00:27:56,640 --> 00:28:01,840
Speaker 5: framework can genuinely help you live are better investment results

545
00:28:01,880 --> 00:28:05,239
Speaker 5: because I think one of the misconceptions about you know,

546
00:28:05,520 --> 00:28:08,600
Speaker 5: ESG investing, you know, people kind of think ESG investing

547
00:28:08,640 --> 00:28:12,240
Speaker 5: and they just think, Okay, that's you know, sustainable investing.

548
00:28:12,240 --> 00:28:14,440
Speaker 5: If I invest in that way, I'm going to save

549
00:28:14,520 --> 00:28:16,879
Speaker 5: the world. And you know, I think one of the

550
00:28:16,920 --> 00:28:19,760
Speaker 5: things that happened in the last few years, particularly twenty

551
00:28:19,840 --> 00:28:22,879
Speaker 5: twenty two and into twenty twenty three, a lot of

552
00:28:22,880 --> 00:28:27,639
Speaker 5: the kind of ESG label products they meaningfully underperformed. It

553
00:28:27,680 --> 00:28:30,399
Speaker 5: was really more in the equity space as particularly the

554
00:28:30,440 --> 00:28:34,280
Speaker 5: individual funds as well, So ESG funds in twenty twenty two,

555
00:28:34,960 --> 00:28:38,160
Speaker 5: you know, particularly because they don't have they generally don't

556
00:28:38,160 --> 00:28:41,240
Speaker 5: have much exposure to the energy sector, and the energy

557
00:28:41,240 --> 00:28:44,600
Speaker 5: sector was one of the best performing sectors in twenty

558
00:28:44,600 --> 00:28:47,120
Speaker 5: twenty two because energy prices were high, et cetera. I

559
00:28:47,120 --> 00:28:49,480
Speaker 5: think the energy sector was actually up meaningfully, whereas the

560
00:28:49,480 --> 00:28:51,960
Speaker 5: whole market was down. And so the underperformance of some

561
00:28:52,000 --> 00:28:56,800
Speaker 5: of the equity funds on the sustainability side was incredibly meaningful,

562
00:28:56,800 --> 00:28:59,400
Speaker 5: and it kind of led to this, you know, kind

563
00:28:59,400 --> 00:29:02,320
Speaker 5: of whole discuss that people can't therefore shouldn't be allocating

564
00:29:02,360 --> 00:29:06,320
Speaker 5: to ESG funds. It's you know, excluding some parts of

565
00:29:06,360 --> 00:29:10,760
Speaker 5: the universities, you know, contravening managers for duciary duty to

566
00:29:10,840 --> 00:29:14,719
Speaker 5: have access to all the different, you know, interesting investments.

567
00:29:15,040 --> 00:29:17,560
Speaker 5: And you know, in the US, some states even went

568
00:29:17,640 --> 00:29:20,320
Speaker 5: so far as to actually implement anti ESG laws for

569
00:29:20,400 --> 00:29:24,720
Speaker 5: state you know, for state investments, which clearly politicized the

570
00:29:24,880 --> 00:29:31,000
Speaker 5: argument very meaningfully. So for me, ESG investing though, is about,

571
00:29:31,400 --> 00:29:34,440
Speaker 5: you know, ESG investing is a framework. It's a framework

572
00:29:34,440 --> 00:29:39,200
Speaker 5: to focus on risks associated with environments, social and governance.

573
00:29:39,200 --> 00:29:41,880
Speaker 5: And actually, if you are thinking about it as a

574
00:29:41,960 --> 00:29:44,200
Speaker 5: risk framework, it can actually really help you and be

575
00:29:44,280 --> 00:29:47,800
Speaker 5: quite additive. And generally what does that mean. That usually

576
00:29:47,800 --> 00:29:49,360
Speaker 5: means you end up with funds, You end up with

577
00:29:49,400 --> 00:29:52,520
Speaker 5: indices that kind of exclude things which have the highest

578
00:29:52,760 --> 00:29:54,959
Speaker 5: ESG risks. And actually, when you when you kind of

579
00:29:55,280 --> 00:30:01,480
Speaker 5: look at historical historical performances of ESG or ESG funds,

580
00:30:01,520 --> 00:30:05,200
Speaker 5: they actually tend to have a fairly decent performance, if

581
00:30:05,240 --> 00:30:07,760
Speaker 5: not better performance than traditional funds. And I think one

582
00:30:07,760 --> 00:30:10,080
Speaker 5: of the most important points is that they do it

583
00:30:10,080 --> 00:30:12,560
Speaker 5: with a lower volativity. So one of the one of

584
00:30:12,560 --> 00:30:15,440
Speaker 5: the kind of very strong themes that you see, particularly

585
00:30:15,520 --> 00:30:19,040
Speaker 5: in ESG equity indices that they do exhibit exhibit a

586
00:30:19,080 --> 00:30:22,560
Speaker 5: lower volatility, so long term risk adjuster returns tend to

587
00:30:22,560 --> 00:30:25,760
Speaker 5: be very good. Comparing that to impact investing, I think

588
00:30:25,800 --> 00:30:29,480
Speaker 5: one of the things that you know, it's most prevalent

589
00:30:29,600 --> 00:30:32,560
Speaker 5: with ESG in if you have just a typical ESG

590
00:30:32,720 --> 00:30:36,160
Speaker 5: fund or a typical ESG index, you are generally removing

591
00:30:36,520 --> 00:30:40,120
Speaker 5: that you know, the highest risk ESG companies. But when

592
00:30:40,160 --> 00:30:43,480
Speaker 5: it comes to impact investing, the contrast, the difference is

593
00:30:44,000 --> 00:30:44,960
Speaker 5: it's much more of a.

594
00:30:44,920 --> 00:30:46,040
Speaker 3: Screening in approach.

595
00:30:46,240 --> 00:30:48,760
Speaker 5: So we are you know, when I think particularly impact

596
00:30:48,760 --> 00:30:51,760
Speaker 5: investing in public markets, it's much more of a you

597
00:30:51,840 --> 00:30:57,200
Speaker 5: are looking for the solution providers to sustainability issues, and

598
00:30:57,240 --> 00:31:00,240
Speaker 5: so it's not necessarily about okay, let's just remin the

599
00:31:00,280 --> 00:31:03,040
Speaker 5: worst ESG names. Is about saying, Okay, these are the

600
00:31:03,040 --> 00:31:06,160
Speaker 5: things I think are the most important problems that we're

601
00:31:06,160 --> 00:31:09,360
Speaker 5: facing from a sustainability perspective. Let's find the companies that

602
00:31:09,360 --> 00:31:12,440
Speaker 5: are doing something about it and focus them. So it's

603
00:31:12,520 --> 00:31:15,400
Speaker 5: much more of a screening in approach, and you're looking

604
00:31:15,440 --> 00:31:18,880
Speaker 5: for kind of companies that are creating the best outcomes,

605
00:31:19,240 --> 00:31:21,400
Speaker 5: and you know, I think it only really works if

606
00:31:21,440 --> 00:31:22,680
Speaker 5: you can kind of do it in a way that

607
00:31:22,720 --> 00:31:25,040
Speaker 5: you're saying, yes, I want to kind of try and

608
00:31:25,120 --> 00:31:29,600
Speaker 5: generate some impact with my portfolio, but I need to

609
00:31:29,960 --> 00:31:33,280
Speaker 5: deliver returns as well. So striking that balance between returns

610
00:31:33,800 --> 00:31:39,240
Speaker 5: and you know, outcomes oriented impact investing, you know, for us,

611
00:31:39,320 --> 00:31:43,000
Speaker 5: is really key, and I think it's something you're going

612
00:31:43,040 --> 00:31:44,600
Speaker 5: to see more and more. And I also think it's

613
00:31:44,600 --> 00:31:46,640
Speaker 5: something that can really make you money as well, because

614
00:31:47,080 --> 00:31:49,800
Speaker 5: a lot of the themes that you know, we focus on.

615
00:31:50,360 --> 00:31:52,200
Speaker 5: You know, despite the fact that you've seen this kind

616
00:31:52,200 --> 00:31:54,640
Speaker 5: of big humpin sentiment, it's.

617
00:31:54,480 --> 00:31:55,240
Speaker 3: Not going away.

618
00:31:55,440 --> 00:31:57,920
Speaker 5: You know, all of the problems that are facing us

619
00:31:58,320 --> 00:32:01,280
Speaker 5: from a sustainability perspective, it's going to be very important

620
00:32:01,320 --> 00:32:04,320
Speaker 5: to allocate capital towards them. And I think the companies

621
00:32:04,320 --> 00:32:06,840
Speaker 5: that are doing this best are going to be incredibly

622
00:32:06,880 --> 00:32:10,320
Speaker 5: successful and they can really help you generate very interesting

623
00:32:10,440 --> 00:32:12,560
Speaker 5: investment returns, but then.

624
00:32:12,480 --> 00:32:14,360
Speaker 1: High political risk at the same time. You presume that,

625
00:32:14,440 --> 00:32:16,280
Speaker 1: you know, if you get into solar panels or windmills,

626
00:32:16,280 --> 00:32:18,000
Speaker 1: and you know, Donald Trump wakes up one day and

627
00:32:18,080 --> 00:32:21,440
Speaker 1: just decides to ditch the lot. You're kind of exposed

628
00:32:21,480 --> 00:32:21,760
Speaker 1: to that.

629
00:32:21,760 --> 00:32:23,240
Speaker 3: Right utually.

630
00:32:23,480 --> 00:32:26,360
Speaker 5: Yeah, I mean, I think it's becoming a bit harder

631
00:32:26,400 --> 00:32:29,880
Speaker 5: to navigate, you know, to navigate this this world at

632
00:32:29,920 --> 00:32:32,960
Speaker 5: the moment, and I think the last few weeks have

633
00:32:33,080 --> 00:32:35,920
Speaker 5: demonstrated that quite clearly. You know, there's been some pretty

634
00:32:36,120 --> 00:32:40,400
Speaker 5: radical moves by Trump and US policy. It's had a

635
00:32:40,440 --> 00:32:44,360
Speaker 5: big impact on European issuers that do focus on renewable energy.

636
00:32:44,840 --> 00:32:46,600
Speaker 5: You know, I would like to think that this is

637
00:32:46,760 --> 00:32:49,600
Speaker 5: a relatively temporary phenomenon, you know, I think I think

638
00:32:49,640 --> 00:32:52,000
Speaker 5: when it comes down to it, I mean, Trump is

639
00:32:52,320 --> 00:32:54,640
Speaker 5: a little bit unpredictable, but at the end of the day,

640
00:32:54,680 --> 00:32:59,080
Speaker 5: he's focused on actually cheap energy. So I think that's

641
00:32:59,120 --> 00:33:02,120
Speaker 5: one of the challenges faces. You know, if we want

642
00:33:02,120 --> 00:33:05,040
Speaker 5: to dig into the kind of the energy topic, it's

643
00:33:05,080 --> 00:33:07,640
Speaker 5: going to be about making sure that we get clean

644
00:33:07,840 --> 00:33:10,280
Speaker 5: energy that is cost effective one way or another.

645
00:33:10,520 --> 00:33:13,360
Speaker 2: What do you think returns look like this year spread

646
00:33:13,360 --> 00:33:18,800
Speaker 2: wise and so on, Given that we've had two relatively

647
00:33:18,880 --> 00:33:21,480
Speaker 2: good years for credit, what do you think twenty twenty

648
00:33:21,520 --> 00:33:23,840
Speaker 2: five might bring at the end.

649
00:33:24,160 --> 00:33:29,480
Speaker 5: So sector wise, I think I guess the one small

650
00:33:29,520 --> 00:33:32,320
Speaker 5: sector we haven't touched upon, which I think is really

651
00:33:32,360 --> 00:33:36,040
Speaker 5: interesting is the satellite space. And so I think that

652
00:33:36,200 --> 00:33:39,720
Speaker 5: for me is one which has been incredibly interesting for

653
00:33:39,720 --> 00:33:42,160
Speaker 5: the last twelve months because I think sentiment has been

654
00:33:42,240 --> 00:33:46,720
Speaker 5: incredibly divided. Also, I think what makes it interesting is

655
00:33:46,760 --> 00:33:49,200
Speaker 5: it's kind of one of the areas where you can

656
00:33:49,280 --> 00:33:53,760
Speaker 5: play the defense theme in Europe. Now you're going to

657
00:33:53,760 --> 00:33:56,400
Speaker 5: be in a position where a portion of the defense

658
00:33:56,440 --> 00:34:00,680
Speaker 5: funding will clearly be channeled towards these sorts of operators.

659
00:34:01,120 --> 00:34:04,960
Speaker 5: You know, jump back nine to twelve months, I think

660
00:34:05,040 --> 00:34:09,279
Speaker 5: sentiment in this sort of small sector was very, very weak,

661
00:34:09,800 --> 00:34:13,799
Speaker 5: driven by competition from Stylink et cetera. And you've been

662
00:34:13,800 --> 00:34:16,319
Speaker 5: on an incredibly large round trip and you know, you've

663
00:34:16,320 --> 00:34:19,160
Speaker 5: come from a place where you know, I think the

664
00:34:19,239 --> 00:34:22,760
Speaker 5: market was very divided, but lots of people thought these

665
00:34:22,840 --> 00:34:24,960
Speaker 5: these guys would be under a whole lot of pressure.

666
00:34:25,239 --> 00:34:25,400
Speaker 3: You know.

667
00:34:25,480 --> 00:34:29,040
Speaker 5: Jump forward into twenty twenty five, you've got the tail

668
00:34:29,080 --> 00:34:31,120
Speaker 5: with the defense spending and a number of other things

669
00:34:31,160 --> 00:34:33,640
Speaker 5: which which are feeling them spread still I think at

670
00:34:33,719 --> 00:34:36,799
Speaker 5: very interesting levels. So I think that's that kind of

671
00:34:36,800 --> 00:34:39,080
Speaker 5: ticks a few boxes in terms of things that maybe

672
00:34:39,200 --> 00:34:42,319
Speaker 5: stand out because away from that, and you.

673
00:34:42,320 --> 00:34:44,400
Speaker 3: Know, there are obviously a few individual situations.

674
00:34:44,440 --> 00:34:47,640
Speaker 5: I mean, I think generically in ig it's it's hard

675
00:34:47,640 --> 00:34:50,839
Speaker 5: to kind of get too excited about any kind of

676
00:34:51,560 --> 00:34:54,839
Speaker 5: larger sector because spreads have just got so compressed. I mean,

677
00:34:54,880 --> 00:34:56,640
Speaker 5: there are you know, there are things that are interesting,

678
00:34:57,400 --> 00:35:00,279
Speaker 5: you know, financial especial non financials we've talked about. I

679
00:35:00,320 --> 00:35:04,359
Speaker 5: think utilities probably screen somewhere that there is a little

680
00:35:04,360 --> 00:35:07,000
Speaker 5: bit of value as well. I think that's partly driven

681
00:35:07,040 --> 00:35:09,560
Speaker 5: by the fact that you're seeing quite a lot of

682
00:35:09,600 --> 00:35:15,759
Speaker 5: capex being actually channeled towards transition and you know, developing

683
00:35:15,960 --> 00:35:17,520
Speaker 5: new types of more clean energy.

684
00:35:17,560 --> 00:35:20,600
Speaker 3: But it means they need to issue.

685
00:35:19,520 --> 00:35:21,000
Speaker 5: A lot of bonds, and I think, you know, the

686
00:35:21,040 --> 00:35:23,160
Speaker 5: kind of consistent level of supply that you see in

687
00:35:23,200 --> 00:35:27,120
Speaker 5: the market in Europe keeps spreads a little bit wider there,

688
00:35:27,160 --> 00:35:32,239
Speaker 5: so I think, and obviously there's an element of you know,

689
00:35:32,280 --> 00:35:34,840
Speaker 5: they're not too cyclical, so they feel a bit more defensive,

690
00:35:34,880 --> 00:35:37,680
Speaker 5: and so the evaluation argument's a bit better there. Look,

691
00:35:37,719 --> 00:35:40,200
Speaker 5: I mean, so far, credit performance this year has been

692
00:35:40,280 --> 00:35:44,719
Speaker 5: obviously very very good. We've reached the tightest levels. What's

693
00:35:44,760 --> 00:35:46,279
Speaker 5: it going to be like into the end of the yet. Look,

694
00:35:46,320 --> 00:35:49,319
Speaker 5: I think my base case would be September is going

695
00:35:49,360 --> 00:35:53,439
Speaker 5: to be a little bit wobbily, you know. I think

696
00:35:53,440 --> 00:35:56,200
Speaker 5: it's seasonally a week month. We're going to have lots

697
00:35:56,200 --> 00:35:58,400
Speaker 5: of supply. I think you could have, you know, some

698
00:35:58,480 --> 00:36:02,880
Speaker 5: volatility driven by France, but I think coming into the

699
00:36:02,960 --> 00:36:08,600
Speaker 5: end of the year will probably be a fairly good

700
00:36:08,800 --> 00:36:11,840
Speaker 5: for credit. You know, A hasten to say, it's a

701
00:36:11,840 --> 00:36:14,759
Speaker 5: bit of a wider than tighter, and we can end

702
00:36:14,840 --> 00:36:16,880
Speaker 5: up finishing the year on a fairly good note. But

703
00:36:16,920 --> 00:36:20,399
Speaker 5: I think that's that's probably the path forward from where

704
00:36:20,400 --> 00:36:22,120
Speaker 5: we are now. I think, you know, the conditions that

705
00:36:22,280 --> 00:36:25,800
Speaker 5: pushed credit spreads to where they are do remain in place.

706
00:36:25,840 --> 00:36:29,480
Speaker 5: I think overall, I mean the camp that growth remains

707
00:36:29,520 --> 00:36:32,680
Speaker 5: okay in the US, and you know, and I think

708
00:36:32,719 --> 00:36:33,800
Speaker 5: the tailwinds.

709
00:36:33,360 --> 00:36:34,720
Speaker 3: In Europe are probably slightly greater.

710
00:36:34,960 --> 00:36:38,640
Speaker 5: So those things, you know, along with the fact that

711
00:36:38,680 --> 00:36:42,759
Speaker 5: we've got interesting yields. Spreads are very tight, but you've

712
00:36:42,800 --> 00:36:45,759
Speaker 5: got a tremendous amount of demand coming into credit in

713
00:36:45,800 --> 00:36:49,080
Speaker 5: both the US and Europe at these sorts of levels

714
00:36:49,440 --> 00:36:52,759
Speaker 5: from fixed maturity funds. I think you're seeing interesting developments

715
00:36:52,760 --> 00:36:55,480
Speaker 5: in things like active ETFs. You know, there's lots of

716
00:36:55,560 --> 00:36:59,320
Speaker 5: kind of new products, which are are you know, facilitating

717
00:37:00,160 --> 00:37:02,760
Speaker 5: access to the market. I think you've got cross currency

718
00:37:02,880 --> 00:37:06,400
Speaker 5: dynamics from other parts of the world making European credit

719
00:37:06,440 --> 00:37:08,799
Speaker 5: look a bit more interesting as well. So all these

720
00:37:08,800 --> 00:37:11,920
Speaker 5: things will will help. I think if you do have

721
00:37:11,960 --> 00:37:13,839
Speaker 5: a backup in September and you do see a bit

722
00:37:13,840 --> 00:37:18,440
Speaker 5: of volatility, I think there's plenty of plenty of firepower

723
00:37:18,480 --> 00:37:21,279
Speaker 5: on the side to re engage with the market and

724
00:37:23,040 --> 00:37:26,080
Speaker 5: maybe take us back to not necessarily the tights, but

725
00:37:26,360 --> 00:37:28,200
Speaker 5: market in relatively decent shape.

726
00:37:28,880 --> 00:37:30,920
Speaker 1: I think what Totally was also asking kind of was

727
00:37:31,280 --> 00:37:32,840
Speaker 1: what's your edge in terms of, you know, how you

728
00:37:32,840 --> 00:37:35,000
Speaker 1: differentiate yourself, which I will which I will get to.

729
00:37:35,120 --> 00:37:37,319
Speaker 1: But when we ask people that on this show, they

730
00:37:37,360 --> 00:37:42,520
Speaker 1: mostly say structure, products, clos and everyone loves private credit.

731
00:37:42,600 --> 00:37:44,920
Speaker 1: So I'm wondering, what's your view right now in private

732
00:37:45,120 --> 00:37:49,160
Speaker 1: against public You know that the yields seem great opportunity

733
00:37:49,160 --> 00:37:51,080
Speaker 1: of the century.

734
00:37:51,760 --> 00:37:52,359
Speaker 3: Yeah, I mean, I.

735
00:37:52,280 --> 00:37:58,640
Speaker 5: Think public credit is far superior, coming from a domestic

736
00:37:58,719 --> 00:38:03,520
Speaker 5: bias of being heavily involved in public credit. But look,

737
00:38:03,520 --> 00:38:06,839
Speaker 5: it's easy to it's easy to trash private credit at

738
00:38:06,840 --> 00:38:09,600
Speaker 5: the moment, I think, you know, you're seeing rising, you

739
00:38:09,640 --> 00:38:12,319
Speaker 5: are seeing you know, default rates, especially in leverage loans

740
00:38:12,360 --> 00:38:14,960
Speaker 5: in the US, go up a bit. You know, it's

741
00:38:15,120 --> 00:38:18,960
Speaker 5: been a tremendous few years of an explosion in terms

742
00:38:18,960 --> 00:38:22,400
Speaker 5: of the assets that have gone there. You know, is

743
00:38:22,440 --> 00:38:25,320
Speaker 5: it this kind of big kind of disaster waiting to happen?

744
00:38:25,680 --> 00:38:28,120
Speaker 5: I look, I mean, I think it's easy to be concerned.

745
00:38:28,120 --> 00:38:29,920
Speaker 5: It's probably right to be concerned. I think if you

746
00:38:29,960 --> 00:38:33,120
Speaker 5: had a credit downturn right now, if we did kind

747
00:38:33,120 --> 00:38:37,440
Speaker 5: of slip into a period where growth and weaker, then

748
00:38:37,960 --> 00:38:39,720
Speaker 5: I think it would be a problem.

749
00:38:40,160 --> 00:38:42,439
Speaker 3: Do I think it would be a systemic issue. I don't.

750
00:38:42,480 --> 00:38:45,279
Speaker 3: I personally don't think it would. You know, I kind

751
00:38:45,280 --> 00:38:46,840
Speaker 3: of do subscribe.

752
00:38:46,239 --> 00:38:49,400
Speaker 5: To the notion that actually, you've taken a lot of

753
00:38:49,400 --> 00:38:55,000
Speaker 5: this debt off, you know, leathered bank balance sheets into

754
00:38:55,680 --> 00:38:59,880
Speaker 5: unleathered format or certainly less leathered format, which provides some

755
00:39:00,080 --> 00:39:02,799
Speaker 5: element of cushion. So I think that's kind of quite

756
00:39:02,800 --> 00:39:05,360
Speaker 5: an interesting concept to think about. But yeah, look, I

757
00:39:05,360 --> 00:39:07,800
Speaker 5: mean I think they'll they'll probably be a point where

758
00:39:08,520 --> 00:39:10,200
Speaker 5: you know, you do see you do see losses, and

759
00:39:10,239 --> 00:39:13,440
Speaker 5: people get very concerned. You know, I think at this

760
00:39:13,520 --> 00:39:16,960
Speaker 5: point in time. Public markets provide a tremendous amount of

761
00:39:16,960 --> 00:39:20,359
Speaker 5: flexibility for people. You know, the returns on offer are

762
00:39:20,400 --> 00:39:23,920
Speaker 5: actually pretty good. Liquidity is obviously a lot better. In

763
00:39:24,000 --> 00:39:26,480
Speaker 5: my sort of sales pitch of public versus private, i'd

764
00:39:26,480 --> 00:39:29,880
Speaker 5: probably highlight those points. There are definitely concerns on the

765
00:39:29,880 --> 00:39:33,120
Speaker 5: private side, but I yeah, probably not.

766
00:39:33,160 --> 00:39:35,520
Speaker 3: I'm not going to go into the bang the doom

767
00:39:35,560 --> 00:39:38,720
Speaker 3: and gloom drum too hard.

768
00:39:39,080 --> 00:39:40,839
Speaker 1: But you just don't do it. You just don't have

769
00:39:41,040 --> 00:39:43,040
Speaker 1: the ability to do private is that right? Or you

770
00:39:43,080 --> 00:39:44,239
Speaker 1: could do it, we just don't want to.

771
00:39:45,040 --> 00:39:47,719
Speaker 3: We don't do private credit here on our side. Note

772
00:39:49,680 --> 00:39:52,000
Speaker 3: so I mean obviously I'm part of the investment grade

773
00:39:52,040 --> 00:39:55,719
Speaker 3: team and so we it's not it's not part of

774
00:39:55,760 --> 00:39:56,920
Speaker 3: our product suite.

775
00:39:58,239 --> 00:39:59,880
Speaker 2: I think if we can dig a little bit in

776
00:40:00,040 --> 00:40:03,160
Speaker 2: to that sales pitch that you mentioned of public versus

777
00:40:03,160 --> 00:40:07,080
Speaker 2: private credit without giving all the secrets away, maybe you

778
00:40:07,120 --> 00:40:10,359
Speaker 2: can touch a little bit more on what you mean

779
00:40:10,400 --> 00:40:13,080
Speaker 2: by far superior in the public markets, because I'm sure

780
00:40:13,120 --> 00:40:15,480
Speaker 2: that will raise a few eyebrows.

781
00:40:16,480 --> 00:40:18,360
Speaker 4: Are you saying far superior.

782
00:40:17,920 --> 00:40:22,600
Speaker 2: In terms of default or maybe the visibility point that

783
00:40:22,680 --> 00:40:25,799
Speaker 2: you touched on, or maybe it's even returns. And if

784
00:40:25,800 --> 00:40:31,000
Speaker 2: it's returns, like how differentiated or superior do you think

785
00:40:31,080 --> 00:40:35,600
Speaker 2: public market returns might be versus private.

786
00:40:34,960 --> 00:40:37,680
Speaker 5: But obviously that comment was slightly tongue in cheek, like

787
00:40:37,719 --> 00:40:40,120
Speaker 5: I say, I'm not I'm not the private credit expert,

788
00:40:40,200 --> 00:40:42,880
Speaker 5: so I'm not really going to hound the private credit

789
00:40:43,120 --> 00:40:46,640
Speaker 5: side too hard. I think the returns on offer, it's hard.

790
00:40:46,680 --> 00:40:48,399
Speaker 5: It's hard to kind of look back over the last

791
00:40:48,400 --> 00:40:51,399
Speaker 5: few years and say and say anything too negative because

792
00:40:51,440 --> 00:40:55,080
Speaker 5: the returns are being incredibly consistently good. You know, you

793
00:40:55,120 --> 00:40:57,600
Speaker 5: give up some liquidity, you are at a point where

794
00:40:59,080 --> 00:41:01,040
Speaker 5: you can be a bit more. And I think about

795
00:41:01,440 --> 00:41:04,799
Speaker 5: credit quality. You know, you have now had probably two

796
00:41:04,840 --> 00:41:08,040
Speaker 5: or three years where within private credit interest rates have

797
00:41:08,120 --> 00:41:11,680
Speaker 5: been much higher on the kind of floating rate loans.

798
00:41:11,719 --> 00:41:14,920
Speaker 5: That's clearly going to put some pressure, you know, some

799
00:41:15,000 --> 00:41:17,799
Speaker 5: pressure within the space. And you know, obviously there's been

800
00:41:18,120 --> 00:41:21,160
Speaker 5: lots of chat about the level of picks and there

801
00:41:21,200 --> 00:41:24,680
Speaker 5: are warning signs there. So at this point in time,

802
00:41:25,480 --> 00:41:27,560
Speaker 5: you know, if you're if you're looking at the kind

803
00:41:27,600 --> 00:41:30,480
Speaker 5: of returns on offer, I think from you know, from

804
00:41:30,480 --> 00:41:33,680
Speaker 5: a good active manager in the public space that you

805
00:41:33,719 --> 00:41:36,880
Speaker 5: know can outperform the market, you know, give you, provide

806
00:41:36,880 --> 00:41:39,319
Speaker 5: you with a lot of liquidity. It's got to be

807
00:41:39,480 --> 00:41:45,560
Speaker 5: at least a very very good competitive comparison. And yeah,

808
00:41:45,760 --> 00:41:48,080
Speaker 5: you know there's room for both. But but I think

809
00:41:48,080 --> 00:41:51,040
Speaker 5: maybe you're shifting into a period where the flexibility that

810
00:41:51,120 --> 00:41:55,520
Speaker 5: public market products offer you, you know, maybe maybe gives

811
00:41:55,560 --> 00:41:56,600
Speaker 5: it that slight attraction.

812
00:41:57,840 --> 00:42:00,200
Speaker 1: So what's your edge, Tom, What's the thing that you

813
00:42:00,239 --> 00:42:02,839
Speaker 1: do that no one else does. What's the most contrariant

814
00:42:02,840 --> 00:42:03,759
Speaker 1: thing you've got up your sleeve?

815
00:42:04,320 --> 00:42:05,120
Speaker 3: Was it the impact?

816
00:42:05,280 --> 00:42:09,280
Speaker 1: Is it? I know, defense? Is it European banks? What's

817
00:42:09,360 --> 00:42:11,480
Speaker 1: the trade right now that you know you think is

818
00:42:11,680 --> 00:42:13,319
Speaker 1: going to get helper for this year?

819
00:42:13,920 --> 00:42:14,080
Speaker 3: Yeah?

820
00:42:14,120 --> 00:42:15,840
Speaker 5: Look, I mean I think the most interesting thing is

821
00:42:16,600 --> 00:42:19,800
Speaker 5: particularly because the last few years, people have really shied

822
00:42:19,840 --> 00:42:23,319
Speaker 5: away from investing from a sustainability perspective. So I would

823
00:42:23,360 --> 00:42:25,960
Speaker 5: just urge people to think about that, think about the

824
00:42:25,960 --> 00:42:29,799
Speaker 5: fact that it can actually be additive to returns as

825
00:42:29,840 --> 00:42:33,399
Speaker 5: well as actually doing something that's really meaningful. I don't

826
00:42:33,440 --> 00:42:35,520
Speaker 5: think there are a lot of managers out there that

827
00:42:35,600 --> 00:42:39,799
Speaker 5: kind of take this concept, you know, far enough or

828
00:42:39,800 --> 00:42:43,520
Speaker 5: to the extremes. So I think that's something that where

829
00:42:43,719 --> 00:42:48,600
Speaker 5: we do differentiate ourselves here with the strategy that we run.

830
00:42:48,719 --> 00:42:51,200
Speaker 5: So I would, I guess urge people to have a

831
00:42:51,239 --> 00:42:53,480
Speaker 5: think about that, and you know, look across the market

832
00:42:53,560 --> 00:42:56,560
Speaker 5: for strategies that are similar. I think it's really important

833
00:42:56,560 --> 00:43:02,480
Speaker 5: that people do allocate their capital or more thoughtfully going forward.

834
00:43:02,640 --> 00:43:05,879
Speaker 5: And it's very much something that can can tick both

835
00:43:05,920 --> 00:43:09,200
Speaker 5: boxes in terms of you know, making a difference and

836
00:43:09,280 --> 00:43:11,640
Speaker 5: generating returns.

837
00:43:11,680 --> 00:43:15,319
Speaker 2: So you touched on a lot of the opportunities that

838
00:43:15,400 --> 00:43:17,560
Speaker 2: you see, and at the start of the program we

839
00:43:17,680 --> 00:43:21,319
Speaker 2: talked about some of the things that keep others up

840
00:43:21,320 --> 00:43:24,800
Speaker 2: at night, whether it's geopolitical risk or parish.

841
00:43:24,440 --> 00:43:24,879
Speaker 4: And so on.

842
00:43:25,120 --> 00:43:28,440
Speaker 2: But what keeps Blue Bay up at night then, or

843
00:43:28,520 --> 00:43:31,040
Speaker 2: what keeps you as a fund manager at Blue Bay

844
00:43:31,160 --> 00:43:32,680
Speaker 2: up at night at this point.

845
00:43:33,800 --> 00:43:37,799
Speaker 5: My two children. Obviously that's not my answer, but so

846
00:43:39,520 --> 00:43:42,359
Speaker 5: I don't want to deviate too much. I mean, the thing,

847
00:43:42,520 --> 00:43:45,520
Speaker 5: the thing that I think is most that will have

848
00:43:45,640 --> 00:43:48,560
Speaker 5: the biggest negative impact on markets in the near terms

849
00:43:48,600 --> 00:43:52,120
Speaker 5: if we do see if we do see weak growth

850
00:43:52,200 --> 00:43:54,799
Speaker 5: in the US. It's a boring answer, but I think

851
00:43:54,800 --> 00:43:58,400
Speaker 5: that's the thing that's you know, the jury is a

852
00:43:58,480 --> 00:44:01,360
Speaker 5: bit out and you know, we've seen a few periods

853
00:44:01,400 --> 00:44:04,000
Speaker 5: in the last kind of year or two where you've

854
00:44:04,000 --> 00:44:06,320
Speaker 5: seen sort of dips in the data and suddenly people

855
00:44:06,360 --> 00:44:07,920
Speaker 5: start talking about procession.

856
00:44:08,000 --> 00:44:09,240
Speaker 3: I think it's very much.

857
00:44:09,120 --> 00:44:14,120
Speaker 5: Out of people's mindset for the for the most part currently,

858
00:44:14,400 --> 00:44:17,200
Speaker 5: but it's the thing that I think would would kind

859
00:44:17,200 --> 00:44:21,000
Speaker 5: of facilitate the biggest move in markets if we were

860
00:44:21,040 --> 00:44:24,040
Speaker 5: to see you know, another very weak payrolls print and

861
00:44:24,120 --> 00:44:26,240
Speaker 5: we saw you know, kind of weaker economic data.

862
00:44:27,320 --> 00:44:28,879
Speaker 3: I think that's that's probably the.

863
00:44:28,840 --> 00:44:31,480
Speaker 5: Thing I think, you know, I think we haven't touched

864
00:44:31,480 --> 00:44:34,160
Speaker 5: on tariffs very much, which I think is another interesting

865
00:44:34,239 --> 00:44:36,600
Speaker 5: kind of topic where we haven't really seen them the.

866
00:44:36,600 --> 00:44:37,880
Speaker 3: Impact of tariffs yet as well.

867
00:44:37,920 --> 00:44:42,319
Speaker 5: So I think that's something worth you know, contributing a

868
00:44:42,320 --> 00:44:45,160
Speaker 5: little bit of time too when you go to sleep

869
00:44:45,320 --> 00:44:49,440
Speaker 5: in terms of being concerned, because you know, I think

870
00:44:49,480 --> 00:44:51,560
Speaker 5: you could you could be you could be at a

871
00:44:51,600 --> 00:44:53,640
Speaker 5: point down not too far down the line, where you

872
00:44:53,680 --> 00:44:56,759
Speaker 5: do start seeing, well, you start you know, seeing how

873
00:44:56,880 --> 00:45:00,200
Speaker 5: companies are passing on the potential tariff costs. Are you

874
00:45:00,239 --> 00:45:02,040
Speaker 5: going to see it in higher prices? Are you going

875
00:45:02,080 --> 00:45:05,960
Speaker 5: to see it in margin pressure? And therefore, you know,

876
00:45:06,080 --> 00:45:08,960
Speaker 5: pressure on earnings, which is clearly something that the market,

877
00:45:09,080 --> 00:45:10,719
Speaker 5: you know, will focus on as well. So I think

878
00:45:11,280 --> 00:45:15,480
Speaker 5: that's something which I think is worth thinking about. And

879
00:45:15,520 --> 00:45:17,799
Speaker 5: obviously we've talked about France, but you know, it's just

880
00:45:17,840 --> 00:45:20,720
Speaker 5: in the very here and now that's probably the third

881
00:45:20,719 --> 00:45:22,880
Speaker 5: thing to be kind of a bit concerned about, particularly

882
00:45:22,920 --> 00:45:24,080
Speaker 5: from a European perspective.

883
00:45:25,320 --> 00:45:28,000
Speaker 1: Great stuff, Tom Molds with RBC Blue Bay Asset Management

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00:45:28,000 --> 00:45:30,400
Speaker 1: in London. Many thanks for joining us on the Credit Edge.

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00:45:31,640 --> 00:45:33,640
Speaker 3: Pleasure. Great to be here, guys, Thank.

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00:45:33,440 --> 00:45:36,400
Speaker 1: You, and of course very grateful to Tolu Alamutu with

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00:45:36,440 --> 00:45:38,400
Speaker 1: Bloomberg Intelligence. Thanks for joining us today.

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00:45:38,719 --> 00:45:41,560
Speaker 4: Great to be here, Thank you, James, Thank you Tom.

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00:45:41,920 --> 00:45:44,440
Speaker 1: For more credit market analysis and insight, read all of

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Speaker 1: next week on the Credit Edge