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

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

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Speaker 1: This week, we're very pleased to welcome Holger Merton's head

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Speaker 1: of Global credit at Nico Asset Management. How are you, Holger, Hi, James.

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Speaker 2: I'm very well. Thanks for having me on the podcast.

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Speaker 1: Great to see you, Delighted to have you on the show.

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Speaker 1: Also delighted to welcome back co host Tullu Alamutu from

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Speaker 1: Bloomberg Intelligence.

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Speaker 3: Hello, Tullu, Hello James. Great to be here.

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Speaker 1: So just to set the scene a bit before we

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Speaker 1: bring in our speaker. Credit markets are rallying after the

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Speaker 1: US election on hopes of tax cuts, deregulation and pro

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Speaker 1: growth policies from the next administration. At the same time,

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Speaker 1: global bond yields have risen on fears that this will

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Speaker 1: all be quite inflationary. So on the one hand, we're

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Speaker 1: getting a boost from the economic outlook, but on the

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Speaker 1: other there's a big drag from higher for longer interest rates,

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Speaker 1: which will hurt weak borrowers. With a lot of debt

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Speaker 1: coming due. There's a lot of uncertainty about what the

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Speaker 1: next government will do in the US campaign, Trail promises

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Speaker 1: aren't always kept, and politicians will have to adapt to

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Speaker 1: the world as it is to get things done. But

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Speaker 1: one overarching theme is the belief that the next US

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Speaker 1: government will be much less sympathetic to sustainability and environmental issues,

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Speaker 1: if not downright hostile. In some cases, ESG fund managers

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Speaker 1: are being told to keep their lawyers on speed dial,

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Speaker 1: anticipating a wave of litigation as politicians push for duciary

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Speaker 1: duty suits. The future of renewable energy is uncertain, and

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Speaker 1: there are doubts about energy transition as fossil fuels swing

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Speaker 1: back into favor. So Nico has been a trailblazer in

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Speaker 1: green finance. Let's start without what's your view of the

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Speaker 1: impact of US elections on ESG and sustainable finance. What's

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Speaker 1: the outlook in your view?

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Speaker 2: We we sing clearly the political as well as the

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Speaker 2: regulatory backdrop in the s might might we eaten for EASTG,

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Speaker 2: but we also might see this in in Europe. Give

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Speaker 2: the givem the economic situation that that some focus is

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Speaker 2: moved away from from East G. But like there was

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Speaker 2: a reason study from Stanford University, So ninety six percent

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Speaker 2: of PMS in Europe and n c S which were

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Speaker 2: asked so that climate risk is not fully reflected in

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Speaker 2: in asset prices. So if if the political side is

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Speaker 2: not asking for disclosure on on strategies and updates on

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Speaker 2: on on eas G, then then we as as portfolio

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Speaker 2: managers have have to ask for this information because it's

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Speaker 2: our job to make sure we're buying buying assets at

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Speaker 2: the right price.

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Speaker 1: But ESG as a concept, you know, is it really last?

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Speaker 1: That's what people are asking now that that you know,

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Speaker 1: for institutional investors, it just doesn't work.

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Speaker 2: So I mean, like in Europe, there's still a strong push.

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Speaker 2: I mean talking to asset owners, it's it's it's not

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Speaker 2: an important part usually of investment guidelines at this point

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Speaker 2: is getting addressed and I don't think really that this

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Speaker 2: is this is moving away. And also in the US,

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Speaker 2: like if you're looking into some of the initiatives like

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Speaker 2: the Inflational Reduction Act, so this this was also a

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Speaker 2: huge benefit to the economy and also to some of

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Speaker 2: the red states. So I mean, there there is different

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Speaker 2: ways where we see that this is push for for

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Speaker 2: east G is lasting in the future.

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Speaker 3: Thanks to that whole guy.

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Speaker 4: I mean, you will know that Bloomberg has been very

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Speaker 4: significant investor in all things ESG, and our founder has

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Speaker 4: been quite vocal about his views on climate change. So

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Speaker 4: obviously you're sort of amongst friends, I guess in a

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Speaker 4: way speaking to people at Bloomberg, and we have teams

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Speaker 4: in research within BI that are looking at ESG. There's

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Speaker 4: a dedicated spot on our top page looking at ESG

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Speaker 4: as well.

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Speaker 3: But you know, as.

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Speaker 4: James has been outlining, there is this ebb and flow

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Speaker 4: in terms of.

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Speaker 3: Commitment to ESG.

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Speaker 4: And again as he's been outlining, there is this concern

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Speaker 4: about US moving to a drill baby drill type error

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Speaker 4: in the US. Do you think that in that context

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Speaker 4: Europe can really go another way? When you know, we're

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Speaker 4: already seeing people almost sort of shaking in their boosts

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Speaker 4: in terms of other things that the US might be changing,

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Speaker 4: whether that's defense spending and so on. Do you think

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Speaker 4: that Europe can really continue to differentiate itself from the

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Speaker 4: US if the US takes a very different path regarding ESG.

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Speaker 2: Well, it's in some of the reason events related to

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Speaker 2: weather like like in Florid dars, the hurricane season, also

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Speaker 2: the flooding in in in in southern Spain. Just we're

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Speaker 2: reminding people of the of the importance of of the topic.

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Speaker 2: And even if if the the political backdrop is weakening

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Speaker 2: on on one side or the other, I think there

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Speaker 2: is still still support from from from various stakeholders there

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Speaker 2: to to to keep the push for for sustainable future.

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Speaker 2: This is at least what what we're observing from from

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Speaker 2: discussing the topic with with asset owners.

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Speaker 4: Yeah, and you you brought up the truly terrible hurricane

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Speaker 4: disasters and also what we're seeing happening in Spain, specifically

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Speaker 4: in Valencia, and I think all of us on this

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Speaker 4: corn we'll probably have stories of how the weather has changes.

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Speaker 4: We've grown up, So I'm from Nigeria, for instance, and

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Speaker 4: there's much more flooding now, it's a lot hotter than

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Speaker 4: it used to be, and so on. So do you

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Speaker 4: then think that maybe that's where the pressure will come from,

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Speaker 4: like just people's individual experience and the fact that these

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Speaker 4: more frequent UH climate events cost a lot of money,

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Speaker 4: and so the push will come from the real life

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Speaker 4: experience rather than, as you said, the political angle.

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Speaker 2: Yeah, I think by now it's it's probably coming from

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Speaker 2: the experience. I mean, the initial push war was clearly

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Speaker 2: by by from the political side, but as we now

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Speaker 2: see some of these events unfolding, I think the push

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Speaker 2: is coming from a different different direction, and like as

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Speaker 2: a as support for your manager, Like if you have

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Speaker 2: if invested in companies which have production production sites close

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Speaker 2: to one or the other area which is impacted, then

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Speaker 2: then then you feel it also in in your research

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Speaker 2: that this can can make an impact on enterprise value.

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Speaker 1: But longer term though hold I mean people will vote

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Speaker 1: with their wallets in terms of the investors. They won't

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Speaker 1: invest in this at a loss. So can you talk

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Speaker 1: about performance, Because you know you've been in this market

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Speaker 1: since twenty ten, You've got a long track record. I'm

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Speaker 1: interested in how those green assets, how those green bonds

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Speaker 1: perform over time, particularly against other things that aren't green.

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Speaker 2: Yeah, I think there's a sort of paradigm that like

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Speaker 2: if you invest in green and particularly on the fixed

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Speaker 2: income side, you have to expect to give up. And

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Speaker 2: this is something where we want to push strongly against

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Speaker 2: this paradigm or this perception. So we absolutely think that

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Speaker 2: you can make money and invest sustainable. So for us,

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Speaker 2: usually the investment seems on our fixed income portfolios, we

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Speaker 2: apply to a traditional portfolio or a sustainable portfolio, are

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Speaker 2: the same if it comes to rates, credit curve positioning.

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Speaker 2: Just we execute strategy in a way that the bonds

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Speaker 2: which which we are using have gone through our sustainable

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Speaker 2: process and got validated that they fit the points at

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Speaker 2: the green bond criterias. So with this, like if you're

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Speaker 2: looking on the main main investment, seems across our portfolios,

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Speaker 2: they're all the same if it's aditional traditional portfolio or

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Speaker 2: or a green portfolio, but it's it's different different bonds

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Speaker 2: we are using to execute the strategy. And then with

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Speaker 2: this we we are able to make sure that that

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Speaker 2: all the clients also benefit from the same performance.

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Speaker 3: I have a question on greenium.

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Speaker 4: So some of our colleagues in the strategy team actually

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Speaker 4: today they did an update showing that the so called

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Speaker 4: greenium had reduced since the events in the US last week.

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Speaker 4: Do you think that the greenium is something that we

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Speaker 4: will be talking about in a year's time or even

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Speaker 4: imagine five years time, or do you think that we

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Speaker 4: could see those levels converge in some way.

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Speaker 2: I think we already see some some convergence, and I

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Speaker 2: think the greenum is a hot topic in the green

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Speaker 2: bond market, because this goes back to the perception that

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Speaker 2: you have to expect to give up when you when

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Speaker 2: you invest green and like, there was a reason study

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Speaker 2: from Unique Creditor on on data and they were suggesting

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Speaker 2: that the greenum is now at zero and fifty percent

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Speaker 2: with the companies have a positive greenium and fifty percent

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Speaker 2: have a negative greenium. So I mean we have the chance, yes,

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Speaker 2: investors to focus on the companies with a negative greenum.

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Speaker 2: So green bonds which which offer you actually a premium

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Speaker 2: over over traditional bonds. And this sector or bonds are

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Speaker 2: not not that hard to find. I mean, some sectors

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Speaker 2: which have been more active in the primary market can't

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Speaker 2: afford to pay less when they issue, so for instance,

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Speaker 2: the utility sector, this is one of the sectors which

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Speaker 2: are a heavy heavy issue in the green ball market.

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Speaker 2: Companies like Ion are frequent issuers in this market and

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Speaker 2: and and it's unlikely that they can can get away

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Speaker 2: with with the lower spead just because the bonds are green,

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Speaker 2: given given the frequencies they come into the market performance.

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Speaker 1: So hold on. I know it's very hard to find

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Speaker 1: two bonds that you know exactly the same characteristics, but

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Speaker 1: you know one is green and one is not. But

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Speaker 1: in terms of like the relative performance between the two,

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Speaker 1: would you say that they perform pretty much in line,

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Speaker 1: but one is less volatile or one is you know,

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Speaker 1: less susceptible to big you know, swings in other parts

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Speaker 1: of the market. And how do you differentiate green compared

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Speaker 1: to other other assets?

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Speaker 2: Yeah, I mean an important point you made is it's

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Speaker 2: it's hard to find bonds which are both completely the

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Speaker 2: same and one is green and not one not. This

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Speaker 2: makes it actually quite hard to measure as the greenium

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Speaker 2: in the first place. But to your second question, they

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Speaker 2: in general we find that that during times when when

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Speaker 2: we have elevated rates volatility, these G bonds seem to

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Speaker 2: be more stable, less volatile tend to outperform, and then

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Speaker 2: vice versa. The the these these bonds underperform when uh,

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Speaker 2: this situation is turning, but over a longer time period

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Speaker 2: looking on on spread moves, it's it's pretty much the same.

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Speaker 2: So yeah, and this goes back to what I said,

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Speaker 2: I don't think that you're missing out when you when

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Speaker 2: you execute your stateity with the green bond.

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Speaker 4: I have a question on documentation and targets and so on.

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Speaker 4: So one of the issues that has come up has

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Speaker 4: been that some of the targets maybe aren't ambitious enough.

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Speaker 4: I remember a few years ago looking at a company

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Speaker 4: in an emerging market where they were saying we would

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Speaker 4: have x percentage where on the board, and it turned

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Speaker 4: out that the stock exchanged that they were listed on

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Speaker 4: required them to have an even higher percentage. So sometimes

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Speaker 4: the targets aren't as good as they should be. Is

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Speaker 4: that a concern for you? Are you having to push

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Speaker 4: back on issuers when they disclose targets that are not

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Speaker 4: ambitious enough.

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Speaker 2: Well, I mean there are two type of bonds. I

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Speaker 2: mean on one end you have the use of proceed

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Speaker 2: bonds and the green bonds belong to this group. So

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Speaker 2: there is the green bond framework, which makes a promise

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Speaker 2: where the money is used for. And then after the

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Speaker 2: money is allocated, you get the allocation report and you

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Speaker 2: can then actually see where the money is used. And

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Speaker 2: there are some use of proceeds which which are strong

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Speaker 2: and some are weak, like if the companies entirely using

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Speaker 2: the money for refinancing, this is seen as quite weak

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Speaker 2: and then we most likely are going going going to

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Speaker 2: sell responds because this is not fitting what we have

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Speaker 2: in mind. And then the second group of bonds there's

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Speaker 2: the money used for general corporate purpose. And then but

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Speaker 2: what these companies are doing is they're committing to certain

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Speaker 2: goals and this is the group of the sustainable linked

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Speaker 2: goals sustainable linked bonds. And this group made themselves a

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Speaker 2: bad name because some of these hurdles they were setting

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Speaker 2: were just too low. And if the companies are not

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Speaker 2: meeting this this hurdles, they usually have to pay a penalty.

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Speaker 2: This is probably while they were setting the goals pretty low.

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Speaker 2: And then also some companies they came up with some

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Speaker 2: call features so if they were potentially facing a penalty,

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Speaker 2: they had the option to call the bonds. And so

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Speaker 2: these sustainable linked bonds intuitively are a great idea. Like

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Speaker 2: I mean, you set a goal, If you don't meet

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Speaker 2: this goal, you have to face a penalty. But some

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Speaker 2: issues gave this group a bad name. And by now

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Speaker 2: some standards are developed helpping what is acceptable for for

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Speaker 2: investors and the structures are improving. But you know, I mean,

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Speaker 2: like perception, bad perception sticks quite long and and and

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Speaker 2: this is what this group of of bond structure has

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Speaker 2: to work now against.

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Speaker 1: How do you think about additionality in the green bond market,

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Speaker 1: you know, by which we mean funded projects should be distinct,

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Speaker 1: you know, not for distinct environmental benefits beyond standard practice.

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Speaker 2: So you talk about the the the use of proceed

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Speaker 2: of how it so I mean we we we take

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Speaker 2: a close look on on on what the money is

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Speaker 2: used for after we we got the additional information in

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Speaker 2: the use of proceed report. And like if you if

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Speaker 2: you're looking into some of the utility companies, it absolutely

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Speaker 2: makes sense what what they're using the money for. Like

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Speaker 2: if you're taking a grid operator like Ion, they they

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Speaker 2: investing in smart meat is in in in their in

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Speaker 2: their network because this gives them first first and information

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Speaker 2: about what the the customers are actually using in their homes.

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Speaker 2: And and this is quite important for for for a

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Speaker 2: grid operator because they can't control the supply side anymore

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Speaker 2: because they're getting not getting energy from a nuclear planet.

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Speaker 2: They're getting it now from from sun and wind. And

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Speaker 2: with this uncertainty, they need better information on on the

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Speaker 2: on the customer side and and installing smart meters. So

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Speaker 2: this is quite good good reasoning or good project and

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Speaker 2: and and something we we views as quite positive.

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Speaker 4: So you've mentioned the utility sector is one that you've

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Speaker 4: been focusing on. Are there other sectors where you're seeing

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Speaker 4: opportunities for sustainabilit sustainability link or other sort of ESG

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Speaker 4: type bonds.

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Speaker 2: Well, like if you if you're looking into the Green bond,

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Speaker 2: I mean utilities are clearly the focus for the fund

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Speaker 2: because I mean this is where we're seeing most of

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Speaker 2: the stations where there is a demand for transition at

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Speaker 2: at the highest. Other sectors where where there is where

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Speaker 2: which are aiming for transition are the real estate sector.

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Speaker 2: I mean like if you if you run a wholesale

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Speaker 2: distribution center, you have the option to change the lights

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Speaker 2: to LED, you can can use the roof for for

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Speaker 2: solar panels. And then banks are also quite big sector.

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Speaker 2: I mean they can make a difference in in in

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Speaker 2: their lending portfolio what they are focusing on and and

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Speaker 2: so we have the chance to support them with his efforts.

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Speaker 2: So this are a couple of sectors which which show

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Speaker 2: up with a with a good good good allocation in

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Speaker 2: in in our portfolio.

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Speaker 3: Yeah, I think you mentioned two of the sectors that

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Speaker 3: I cover.

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Speaker 4: There's a real estate and and of course you know

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Speaker 4: utilities are sort of key and in some ways linked

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Speaker 4: to real estate. So if we maybe focus on real

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Speaker 4: estate for a little bit, which is where I spend

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Speaker 4: most of my time, there's a number of ways I

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Speaker 4: guess that they can address issues around emissions specifically, whether

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Speaker 4: it's like in construction or making more efficient workspaces to

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Speaker 4: adapt to hybrid working or whatever else. But maybe we

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Speaker 4: can focus on the heating and cooling of building issue

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Speaker 4: because I guess it goes to the utilities question as well.

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Speaker 4: Here in the UK, one of the issues has been

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Speaker 4: that there were sort of national targets for what should

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Speaker 4: be achieved in terms of smart meters, in terms of

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Speaker 4: transitioning from certain types of heat heating to others. But

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Speaker 4: they've been pushed back or adjusted. So is there a

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Speaker 4: risk that because of the cost of these things, some

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Speaker 4: of those utility comes Maybe some of the real estate

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Speaker 4: companies as well don't meet the targets because you know,

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Speaker 4: it's out of their control that smart meters are instored

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Speaker 4: in every single part of the UK, or everyone changes

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Speaker 4: their boilers are a much more efficient one, and so on.

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Speaker 2: I mean, there's always the risk that that you're setting

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Speaker 2: targets and and and they are not met. I mean,

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Speaker 2: we have seen this in Europe with a couple of companies.

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Speaker 2: I mean when when the Ukraine War broke out, that

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Speaker 2: that some some companies were struggling with targets like I

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Speaker 2: think in Neel were the first issue which we're breaking

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Speaker 2: targets under their SYSTEMA linked notes. So I mean, clearly

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Speaker 2: there's a risk, but still I prefer some some ambitious

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Speaker 2: targets and and and then when when they're broken, we

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Speaker 2: have to discuss with with the issue which went wrong,

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Speaker 2: what went wrong, rather than having easy targets and and

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Speaker 2: which are meaningless and easy, easy to beat.

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Speaker 3: I definitely agree on that.

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Speaker 4: And just to say on in now my colleague Paul Vickers,

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Speaker 4: I think has covered that issue quite a lot because

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Speaker 4: as you said, you know, ambitious targets can sometimes not

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Speaker 4: be met.

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Speaker 3: But on the real estate side.

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Speaker 4: One of the topics that people are discussing a little

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Speaker 4: bit more is the issue of possible stranded assets where

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Speaker 4: there are old buildings they can't be retrofitted or it's

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Speaker 4: too expensive to retrofit them, and so you might see

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Speaker 4: valuations of whole portfolios affected because they have to be

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Speaker 4: written down because these buildings are obsolete. Basically, do you

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Speaker 4: think that that's a significant risk for the real estate sector,

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Speaker 4: especially going into twenty twenty five when maybe they're moving

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Speaker 4: away from them the whole rate issue to more issues

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Speaker 4: like this or do you think that it's a risk

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Speaker 4: that people are focusing too much on at the moment now.

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Speaker 2: I think the real estate sector is the sector which

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Speaker 2: which really needs bottom up attention from from the analyst team.

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Speaker 2: I mean it really depends on what assets is a

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Speaker 2: READ for instance, invested his office, this is residential? Is

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Speaker 2: this wholesale distribution center? And like if it's offices, then

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Speaker 2: then then I guess it comes to to what you

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Speaker 2: were mentioning. I mean, how old are these assets? Can

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Speaker 2: can they be transformed to a to a modern green

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Speaker 2: building or not? And what does it cost to do this?

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Speaker 2: So I think some some bottom upwork needs to be

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Speaker 2: done here Before you start to invest into a READ,

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Speaker 2: you need information about what what's actually in the portfolio.

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Speaker 2: And then we have seen some some sort of real

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Speaker 2: estate underperforming and some are outperforming. So wholesale distribution center

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Speaker 2: clear clear clearly we're one of the winners in terms

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Speaker 2: of what what investor liked to have in the portfolio.

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Speaker 2: Water not.

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Speaker 4: So just following on from that, so wholesale distribution centers

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Speaker 4: have performed, and I guess there's a view that because

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Speaker 4: data centers are increasing in in UH need, there's an

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Speaker 4: increase in need for for data centers, they will continue

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Speaker 4: to be supported. That's taken. Are there sub sectors within

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Speaker 4: real estate that you think are at greater risk? Is

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Speaker 4: it offices you think that are at greater risk because

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Speaker 4: of the stranded is asset issue or other issues? Or

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Speaker 4: are there sectors other sectors that you wouldn't be investing

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Speaker 4: in at this point.

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Speaker 2: No, it's clearly it's it's offices. I mean, the the

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Speaker 2: work from home push maybe has weakened a bit, but

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Speaker 2: it's still there. So I guess companies still think about

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Speaker 2: reducing offices, and so I think this is still still

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Speaker 2: a space where probably the greatest concerns and the greatest

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Speaker 2: courtesy when when when when it comes to investing.

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Speaker 3: I actually have a sort of broader question as well.

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Speaker 4: So one of the issues that's come up in my

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Speaker 4: conversations with clients that invest in ESG and others in

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Speaker 4: ESG linked ones and others that don't is that some

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Speaker 4: clients think, look, you have to have a seat at

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Speaker 4: the table, whether you're an equity investor or a credit investor,

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Speaker 4: you have to have a seat at the table with

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Speaker 4: these so called brown companies. So you should continue to

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Speaker 4: invest in them to encourage them to become green. So

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Speaker 4: there's that school of thought, whereas there's another school of

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Speaker 4: thought that says you should vote with your feet and

377
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Speaker 4: you shouldn't invest in brown companies. Which or where do

378
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Speaker 4: you stand in this argument? Do you vote with your

379
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Speaker 4: pockets rather than rather than your feet, sorry, and not

380
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Speaker 4: invest in brown companies? Or do you think that people

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Speaker 4: need to have a seat at the table so that

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Speaker 4: they can define the policies of these companies.

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Speaker 2: Yeah, I think we see companies we still have some

384
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Speaker 2: work to be done. This is the companies where you

385
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Speaker 2: can also make an impact with with your portfolio. So

386
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Speaker 2: like I I wonder like if you if you invest

387
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Speaker 2: along a paras aligned benchmark, I mean, you already own

388
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Speaker 2: all the clean companies, so it's it's really really hard

389
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Speaker 2: to make from there a positive impact. And like being

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Speaker 2: an investor in utility companies, this these are the companies

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Speaker 2: or the type of group of companies will still have

392
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Speaker 2: a lot of work to be done. And and this

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Speaker 2: is where we focus on and I think it's it's

394
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Speaker 2: it's definitely a worsfile effort because like if they are

395
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Speaker 2: able to reduce the ZEO to footprint, this will also

396
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Speaker 2: show a significant reduction in our portfolio ZEO to footprint.

397
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Speaker 2: And then this is what we would like to show

398
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Speaker 2: with with our work and improvement over time in in

399
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Speaker 2: in the carbon output of the of the over world portfolio.

400
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Speaker 2: I mean like with a paras a ligne benchmark, it

401
00:23:53,720 --> 00:23:57,760
Speaker 2: would be would be just go flat and and and

402
00:23:57,800 --> 00:24:02,240
Speaker 2: then also like you can say the it's not that

403
00:24:02,240 --> 00:24:05,719
Speaker 2: that the problem has gone away, it's just in another portfolio,

404
00:24:05,800 --> 00:24:07,200
Speaker 2: just not in our portfolio.

405
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Speaker 1: What do you think about the European green bond standard

406
00:24:11,880 --> 00:24:14,439
Speaker 1: that's coming into force next month? Do you think that

407
00:24:14,440 --> 00:24:16,280
Speaker 1: there will be a lot of take up for that?

408
00:24:16,320 --> 00:24:18,679
Speaker 1: Do you think that the the bonds that are in

409
00:24:18,720 --> 00:24:23,080
Speaker 1: compliance will will be superior, you know, differently priced at

410
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Speaker 1: different green and that sort of thing.

411
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Speaker 2: Well, I guess some of some of what these these

412
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Speaker 2: requirements are is already in place, Like it's what we

413
00:24:34,200 --> 00:24:37,960
Speaker 2: are doing in our approaches. So we were already not

414
00:24:38,280 --> 00:24:41,359
Speaker 2: just focusing on the greenlond framework, We're also looking after

415
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Speaker 2: the company's strategy. So I mean a lot of work

416
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Speaker 2: we do is already in line with the with the

417
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Speaker 2: incoming standards. But also we heard from one utility issue

418
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Speaker 2: they they made a statement with regards to the new

419
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Speaker 2: standards and that they will all of us strictly the

420
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Speaker 2: IGMA standards and will try to get as close as

421
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Speaker 2: possible to the new EU roles. So this shows you

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00:25:08,119 --> 00:25:11,040
Speaker 2: that maybe it will take some time until they're getting

423
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Speaker 2: fully adapted, and so far the issues will We'll just

424
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Speaker 2: try to stick to what they have followed over the years,

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Speaker 2: and if there is pressure to to to apply the

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Speaker 2: new rules fully, then only they will move. But I

427
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Speaker 2: think it will be a gradual adoption. It will be

428
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Speaker 2: not not from from from the start that that everybody

429
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Speaker 2: is jumping on it.

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Speaker 1: And more broadly, labels actually matter to you told I mean,

431
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Speaker 1: if you look at some markets, like the muni bond

432
00:25:41,040 --> 00:25:43,440
Speaker 1: market in the US, you could say that that whole

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Speaker 1: thing is you know, ESG potentially, but it's not labeled.

434
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Speaker 1: So to what extent does does Nico really care whether

435
00:25:50,560 --> 00:25:52,359
Speaker 1: something has got a label slapped on it or not.

436
00:25:53,840 --> 00:25:56,399
Speaker 2: So it really depends on the strategy. I mean, we

437
00:25:56,840 --> 00:25:59,320
Speaker 2: run our flagship fund which is the Green Bond Fund.

438
00:25:59,359 --> 00:26:02,000
Speaker 2: So for the bond fund, we only buy labeled bonds

439
00:26:02,440 --> 00:26:05,240
Speaker 2: and and not only they have to be labeled and

440
00:26:05,280 --> 00:26:09,800
Speaker 2: they have to also have a second opinion from from

441
00:26:10,119 --> 00:26:13,120
Speaker 2: one of the independent providers on on on the labeling.

442
00:26:15,119 --> 00:26:18,080
Speaker 2: And so this this matters for for all the investments

443
00:26:18,119 --> 00:26:20,439
Speaker 2: we were doing in the fund s s a s

444
00:26:21,440 --> 00:26:24,760
Speaker 2: as well as corporate bonds and actually also for the

445
00:26:24,880 --> 00:26:28,520
Speaker 2: muni bonds. So unibonds are quite a good way to

446
00:26:28,720 --> 00:26:34,399
Speaker 2: actually address biodiversity in the portfolio because like if or

447
00:26:34,440 --> 00:26:39,720
Speaker 2: they may, the main site responsibility for for clean water

448
00:26:39,800 --> 00:26:44,360
Speaker 2: are usually the municipalities and so for instance, we we

449
00:26:45,520 --> 00:26:48,840
Speaker 2: invested in an n w B bank, they are the

450
00:26:48,960 --> 00:26:53,440
Speaker 2: issuing water bonds bonds where the proceed is used to

451
00:26:53,440 --> 00:26:59,600
Speaker 2: to fund municipals to to pursue clean water projects. And

452
00:26:59,680 --> 00:27:04,640
Speaker 2: so actually a less volatile, more safe group can can

453
00:27:04,720 --> 00:27:09,720
Speaker 2: also have an importance in a green bond portfolio because

454
00:27:09,720 --> 00:27:11,639
Speaker 2: this is one of the rare ways for us to

455
00:27:12,000 --> 00:27:16,959
Speaker 2: address at the moment biodiversity in a portfolio context. So

456
00:27:17,000 --> 00:27:20,600
Speaker 2: we would love to see more investment opportunities for this

457
00:27:20,680 --> 00:27:25,119
Speaker 2: investment scene. But actually muni bonds are one way to

458
00:27:25,160 --> 00:27:25,960
Speaker 2: do it right now.

459
00:27:27,400 --> 00:27:31,920
Speaker 4: I mean you've brought up an interesting part of this

460
00:27:32,119 --> 00:27:36,359
Speaker 4: sort of investment biodiversity, and we've seen a few so

461
00:27:36,480 --> 00:27:42,520
Speaker 4: called blue bonds issued obviously specifically targeting all things to

462
00:27:42,520 --> 00:27:46,120
Speaker 4: do with oceans or water bodies and so on. When

463
00:27:46,280 --> 00:27:49,400
Speaker 4: you're considering those investments, do you look at the sovereigns

464
00:27:49,440 --> 00:27:52,520
Speaker 4: as well as looking at banks like you mentioned, or

465
00:27:53,280 --> 00:27:56,639
Speaker 4: do you think that investing in the banks is the

466
00:27:57,000 --> 00:28:01,800
Speaker 4: better way of expressing a view on improving biodiversity.

467
00:28:03,000 --> 00:28:06,040
Speaker 2: To be honest, bluebonds is not not really a standard,

468
00:28:06,160 --> 00:28:09,600
Speaker 2: So we looked into some of the structures. Often issue

469
00:28:09,640 --> 00:28:14,280
Speaker 2: size is pretty small of not not meeting institutional quality.

470
00:28:15,160 --> 00:28:18,399
Speaker 2: Also when on the structure, we tried to get information

471
00:28:18,840 --> 00:28:22,480
Speaker 2: in particularly on one structure, and it was really hard

472
00:28:22,520 --> 00:28:28,320
Speaker 2: to get some insight on on on how it was structured.

473
00:28:28,720 --> 00:28:33,680
Speaker 2: So sounds sounds sounds great bluebonds, but I think there

474
00:28:33,760 --> 00:28:37,359
Speaker 2: is not that much where you could could focus on

475
00:28:37,440 --> 00:28:40,920
Speaker 2: with an institutional but for you at the moment, and.

476
00:28:40,920 --> 00:28:44,160
Speaker 4: Just a quick question on something you mentioned on information,

477
00:28:44,600 --> 00:28:47,080
Speaker 4: because you also mentioned it when it came to the

478
00:28:47,160 --> 00:28:50,840
Speaker 4: real estate names and looking at each asset and so on,

479
00:28:51,240 --> 00:28:55,840
Speaker 4: how easy or difficult is it in general to get

480
00:28:56,000 --> 00:28:59,760
Speaker 4: the level of information that you need to be comfortable

481
00:28:59,760 --> 00:29:04,120
Speaker 4: to invest. And there's obviously many different providers of data.

482
00:29:04,560 --> 00:29:08,400
Speaker 4: How do you consolidate those various sources. Do you just

483
00:29:08,440 --> 00:29:11,280
Speaker 4: decide on one provider or do you have to look

484
00:29:11,360 --> 00:29:13,720
Speaker 4: across the spectrum or providers of info?

485
00:29:15,280 --> 00:29:18,240
Speaker 2: So, I mean one one important point is is the

486
00:29:18,280 --> 00:29:22,200
Speaker 2: second opinion. This is this is something which comes from

487
00:29:22,240 --> 00:29:28,800
Speaker 2: various parties. So whoever got got hired from from the

488
00:29:28,880 --> 00:29:34,680
Speaker 2: issuer to to provide this is second second opinion is

489
00:29:35,320 --> 00:29:38,400
Speaker 2: what we are going to use. So SUS Analytics is

490
00:29:38,640 --> 00:29:45,040
Speaker 2: one of the frequent provider of second opinions. And then

491
00:29:45,080 --> 00:29:48,360
Speaker 2: we we got our own research provider we we are using.

492
00:29:48,840 --> 00:29:51,480
Speaker 2: But but first and foremost it's we we got a

493
00:29:51,520 --> 00:29:55,239
Speaker 2: dedicated east G team which doesn't work on on the

494
00:29:55,280 --> 00:29:58,640
Speaker 2: companies where we invest. And also the east G team

495
00:29:58,760 --> 00:30:01,960
Speaker 2: is leading our effort. It's on engagement. So if if

496
00:30:01,960 --> 00:30:04,600
Speaker 2: we if we feel we are not having all the

497
00:30:04,640 --> 00:30:08,480
Speaker 2: information we need, then then then the PM, together with

498
00:30:08,640 --> 00:30:11,160
Speaker 2: the team is reaching out to the issue, setting up

499
00:30:11,200 --> 00:30:13,840
Speaker 2: a call and trying to get what we need to get.

500
00:30:14,920 --> 00:30:16,800
Speaker 1: So we seem to talk a lot about the E

501
00:30:17,080 --> 00:30:19,240
Speaker 1: part of the E SG equation, but not so much

502
00:30:19,240 --> 00:30:22,720
Speaker 1: about the S and the G social and governance. Those

503
00:30:22,920 --> 00:30:26,800
Speaker 1: incentive just sort of slipped off the radar recently. And

504
00:30:26,840 --> 00:30:28,960
Speaker 1: what's happened to those those bonds? Are there any labeled

505
00:30:28,960 --> 00:30:30,640
Speaker 1: bonds in those markets or what's what's going to go

506
00:30:30,640 --> 00:30:30,960
Speaker 1: on with that?

507
00:30:32,040 --> 00:30:35,360
Speaker 2: Well, I think G IS is important for for any investment.

508
00:30:35,480 --> 00:30:39,480
Speaker 2: I mean, governance is just reflecting management quality, So you

509
00:30:39,560 --> 00:30:42,400
Speaker 2: only want to invest in companies which which is good

510
00:30:42,560 --> 00:30:45,840
Speaker 2: with a good management team. I think the the other

511
00:30:45,920 --> 00:30:50,120
Speaker 2: important point is is social Like I mean on if

512
00:30:50,160 --> 00:30:53,960
Speaker 2: you're looking on new issuans, So on the social side

513
00:30:54,000 --> 00:30:57,560
Speaker 2: we have seen less bonds, so there is much more

514
00:30:58,400 --> 00:31:03,840
Speaker 2: effort uh and issuing size on on on the green side.

515
00:31:04,360 --> 00:31:07,200
Speaker 2: This is also probably reflecting that that on the green

516
00:31:07,280 --> 00:31:11,040
Speaker 2: side there is there is a much higher investment need,

517
00:31:11,560 --> 00:31:15,200
Speaker 2: like in particular for the utility sector. Changing changing from

518
00:31:15,240 --> 00:31:21,680
Speaker 2: from traditional generation to renewal generation just cost billions of

519
00:31:21,680 --> 00:31:24,920
Speaker 2: of of euro or dollar and and you don't have

520
00:31:25,000 --> 00:31:29,040
Speaker 2: this significant investment need really on on the social side.

521
00:31:29,360 --> 00:31:32,600
Speaker 2: And so I mean less new issues means less new

522
00:31:32,880 --> 00:31:38,600
Speaker 2: new opportunities for us and and therefore so in terms

523
00:31:38,600 --> 00:31:42,680
Speaker 2: of market share. I think the the group of social

524
00:31:42,720 --> 00:31:47,800
Speaker 2: bonds has become smaller related in relative terms to the

525
00:31:47,840 --> 00:31:48,640
Speaker 2: green bonds.

526
00:31:50,200 --> 00:31:53,600
Speaker 4: You you talked about the issuance potential there for social

527
00:31:53,640 --> 00:32:00,880
Speaker 4: bonds and versus environmental ones. How big would you say, roughly,

528
00:32:01,080 --> 00:32:08,000
Speaker 4: maybe the potential addressable market is for environmental bonds or

529
00:32:08,000 --> 00:32:11,760
Speaker 4: for ESG type bonds in general. Would you say it's

530
00:32:11,880 --> 00:32:14,960
Speaker 4: trillions or is it more in the billions range?

531
00:32:15,480 --> 00:32:18,920
Speaker 2: Well, I mean, like the the new issues. I think

532
00:32:19,280 --> 00:32:22,840
Speaker 2: usually we have around one point three one point four

533
00:32:22,880 --> 00:32:28,640
Speaker 2: trillion per year on the sustainable site. So this is

534
00:32:28,680 --> 00:32:33,880
Speaker 2: then the whole group of green Bonne social bonds, sustainability bonds.

535
00:32:34,680 --> 00:32:37,800
Speaker 2: But this is a kind of number we are talking about,

536
00:32:37,840 --> 00:32:41,720
Speaker 2: So it's it's it's it's smaller than the traditional market,

537
00:32:41,720 --> 00:32:44,640
Speaker 2: but it's by now a quite quite quite big group.

538
00:32:45,840 --> 00:32:49,680
Speaker 4: And maybe if I could put another big picture question,

539
00:32:51,040 --> 00:32:53,920
Speaker 4: it's almost twenty twenty five, we're all thinking about the

540
00:32:53,960 --> 00:32:57,120
Speaker 4: outlook for the new year. What would you say are

541
00:32:57,160 --> 00:33:00,920
Speaker 4: the biggest risks to ESG investing going in twenty five?

542
00:33:01,280 --> 00:33:03,840
Speaker 4: Is it the changes in the US or are there

543
00:33:03,880 --> 00:33:07,280
Speaker 4: other risks that you think investors and the market should

544
00:33:07,320 --> 00:33:07,880
Speaker 4: be aware of.

545
00:33:09,280 --> 00:33:12,760
Speaker 2: Well, I mean, clearly there are some risks related to

546
00:33:13,200 --> 00:33:16,360
Speaker 2: the new administration coming in. If you're looking into the CUS,

547
00:33:16,520 --> 00:33:20,040
Speaker 2: I mean the Inflation Reduction Act war was and it's

548
00:33:20,120 --> 00:33:25,640
Speaker 2: important there are some allocated text credits, some allocated text credits.

549
00:33:25,920 --> 00:33:28,160
Speaker 2: I mean, we were last week on a call with

550
00:33:28,600 --> 00:33:33,840
Speaker 2: austed the Danish energy generators. They have invested heavily in

551
00:33:34,240 --> 00:33:37,120
Speaker 2: the US renewal sector, and then the management team was

552
00:33:37,200 --> 00:33:41,480
Speaker 2: quanticized if they think that they still will keep the

553
00:33:41,680 --> 00:33:46,800
Speaker 2: rewarded rewarded text credits and they think they they can

554
00:33:46,880 --> 00:33:50,280
Speaker 2: keep it. This was part of the business case to

555
00:33:50,320 --> 00:33:53,040
Speaker 2: do the investments in the first place. And we also

556
00:33:53,120 --> 00:33:59,000
Speaker 2: believe that that companies which have invested got text credits allocated,

557
00:33:59,040 --> 00:34:01,360
Speaker 2: will will be able to keep them. But if this

558
00:34:01,680 --> 00:34:04,600
Speaker 2: is this assumption is wrong, then this could be could

559
00:34:04,600 --> 00:34:07,040
Speaker 2: be a risk for some of these companies. But also

560
00:34:07,120 --> 00:34:08,960
Speaker 2: like it's the question what will happen to it to

561
00:34:09,080 --> 00:34:13,319
Speaker 2: the unallocated credits, will will they be still available for

562
00:34:13,400 --> 00:34:17,520
Speaker 2: future projects? So this this are some of the the

563
00:34:17,680 --> 00:34:23,680
Speaker 2: uncertainties we are facing next year when it comes to

564
00:34:23,880 --> 00:34:24,680
Speaker 2: green investing.

565
00:34:25,760 --> 00:34:28,640
Speaker 1: Do you think though the green bond issuance continues to

566
00:34:28,680 --> 00:34:30,439
Speaker 1: grow at the same place. I was surprised to see

567
00:34:30,440 --> 00:34:34,080
Speaker 1: it as a record high this year despite what's been

568
00:34:34,120 --> 00:34:36,920
Speaker 1: going on. Do you think that it will be another

569
00:34:36,960 --> 00:34:37,799
Speaker 1: record next year?

570
00:34:38,480 --> 00:34:41,680
Speaker 2: I mean, if you take the the the sustainable market

571
00:34:41,719 --> 00:34:43,680
Speaker 2: as a whole, we still have to catch catch up

572
00:34:43,719 --> 00:34:48,480
Speaker 2: with our peak from twenty one. Clearly the group of

573
00:34:48,480 --> 00:34:52,480
Speaker 2: green bonds is pushing strong and and it is outpacing

574
00:34:52,560 --> 00:34:55,600
Speaker 2: the rest. But the whole sustainable market would be great

575
00:34:55,600 --> 00:34:57,560
Speaker 2: if we if we would get back to the to

576
00:34:57,560 --> 00:35:01,640
Speaker 2: the to the top from twenty one. And yeah, I

577
00:35:01,640 --> 00:35:03,879
Speaker 2: think as we have been at this place, I think

578
00:35:03,880 --> 00:35:06,440
Speaker 2: we we we should be able to get back to

579
00:35:06,520 --> 00:35:09,879
Speaker 2: it with a with a solid year on in terms

580
00:35:09,920 --> 00:35:12,760
Speaker 2: of total returns on the fixed income side, we definitely

581
00:35:12,760 --> 00:35:16,560
Speaker 2: have the chance to continue to grow.

582
00:35:17,520 --> 00:35:19,839
Speaker 1: But what pushes it? Is it all sovereign issuance because

583
00:35:19,840 --> 00:35:22,040
Speaker 1: the companies, certainly in the US, they haven't really jumped

584
00:35:22,080 --> 00:35:24,040
Speaker 1: on the bandwagon yet. I mean, is it just going

585
00:35:24,120 --> 00:35:27,280
Speaker 1: to be more European sovereigns pushing the volume?

586
00:35:28,360 --> 00:35:28,520
Speaker 3: Yeah?

587
00:35:28,560 --> 00:35:30,439
Speaker 2: I mean, like if you're looking on the green bond market,

588
00:35:30,520 --> 00:35:32,880
Speaker 2: I think the overall market year to date is up

589
00:35:33,080 --> 00:35:37,520
Speaker 2: eight percent. The European a green bond market is up

590
00:35:37,520 --> 00:35:40,960
Speaker 2: by twenty percent, so it's it's pushing harder. And this

591
00:35:41,800 --> 00:35:47,120
Speaker 2: the European market is divided by fifty percent of sovereign

592
00:35:47,360 --> 00:35:51,880
Speaker 2: SSA issuer and fifty percent corporate bond issue, So I

593
00:35:51,920 --> 00:35:55,480
Speaker 2: mean it's it's the push is coming equally from from

594
00:35:55,600 --> 00:35:57,240
Speaker 2: from both sides in Europe.

595
00:35:58,360 --> 00:36:02,759
Speaker 4: So you talk through what the biggest risks potentially are

596
00:36:02,800 --> 00:36:05,600
Speaker 4: for twenty twenty five, but we can't let you go

597
00:36:05,680 --> 00:36:09,720
Speaker 4: without asking about the biggest opportunities in your view as well.

598
00:36:09,880 --> 00:36:14,759
Speaker 4: So would that be on the European sovereign side that

599
00:36:14,800 --> 00:36:18,200
Speaker 4: you're mentioning, or the corporate side, or maybe within the

600
00:36:18,280 --> 00:36:21,080
Speaker 4: corporate side. Are there specific sectors where you'd say the

601
00:36:21,120 --> 00:36:23,799
Speaker 4: biggest opportunities might be for twenty twenty five.

602
00:36:24,920 --> 00:36:28,040
Speaker 2: Well, I think we have seen a backup of yields

603
00:36:28,080 --> 00:36:31,560
Speaker 2: in the run up to the election, and so we

604
00:36:31,640 --> 00:36:35,360
Speaker 2: expect some normalization. We expect that the market is not

605
00:36:35,480 --> 00:36:39,080
Speaker 2: turning back. It's focused on fundamentals and it's not yet

606
00:36:39,120 --> 00:36:43,040
Speaker 2: given that the recession in the US is avoided, and

607
00:36:43,080 --> 00:36:46,799
Speaker 2: also the European economists look look pretty weak. So I mean,

608
00:36:46,880 --> 00:36:49,840
Speaker 2: one of expectation is clearly that that yields are coming

609
00:36:49,920 --> 00:36:54,880
Speaker 2: down and this this opens up our potential for total

610
00:36:54,960 --> 00:36:59,320
Speaker 2: return total returns next year. I mean on the credit side,

611
00:37:00,200 --> 00:37:03,520
Speaker 2: we we are probably in terms of valuation reaching the

612
00:37:03,560 --> 00:37:08,160
Speaker 2: bottom in terms of of of spread tightening you can reach.

613
00:37:08,680 --> 00:37:12,360
Speaker 2: So here the expectation is is that we could stay

614
00:37:12,400 --> 00:37:15,720
Speaker 2: where we are at the moment, but to go significantly

615
00:37:15,800 --> 00:37:19,839
Speaker 2: tighter from here, it's it's it's hard to imagine, but

616
00:37:19,920 --> 00:37:24,799
Speaker 2: clearly in terms of of of sector allocation, you you

617
00:37:24,840 --> 00:37:28,600
Speaker 2: can single out a couple of sectors which we think

618
00:37:28,800 --> 00:37:31,359
Speaker 2: will do better than others. So I mean we sing

619
00:37:31,520 --> 00:37:35,120
Speaker 2: sectors which benefit usually from from lower rates, will will

620
00:37:35,120 --> 00:37:39,759
Speaker 2: perform nicely, like utilities, like real estate. So these are

621
00:37:39,800 --> 00:37:43,400
Speaker 2: some of the sectors we are favoring. And then like

622
00:37:43,920 --> 00:37:49,200
Speaker 2: if if you have a weaker economic picture, and in

623
00:37:49,239 --> 00:37:54,400
Speaker 2: particular on the consumer sides and consumer product companies probably

624
00:37:54,480 --> 00:37:57,160
Speaker 2: will will perform weaker. We have seen already some some

625
00:37:57,239 --> 00:38:00,760
Speaker 2: top line impact for some of the consumer of our companies.

626
00:38:00,960 --> 00:38:02,719
Speaker 2: So this is a field where we where we are

627
00:38:02,719 --> 00:38:07,200
Speaker 2: a bit more more cautious. Yeah, I think these are

628
00:38:07,280 --> 00:38:09,600
Speaker 2: some of the sector sector of use we have and

629
00:38:09,840 --> 00:38:13,800
Speaker 2: they are also important when it comes to corporate pond investments.

630
00:38:14,200 --> 00:38:17,799
Speaker 4: You said real estate is interesting, So that's great for

631
00:38:17,920 --> 00:38:22,120
Speaker 4: me to hear, definitely, But I have a question on returns.

632
00:38:22,160 --> 00:38:24,719
Speaker 4: You already mentioned that spreads the type we know that,

633
00:38:24,760 --> 00:38:27,839
Speaker 4: but yields are still, as you said, higher than they

634
00:38:27,880 --> 00:38:31,440
Speaker 4: have been historically if we're looking back to sort of

635
00:38:31,440 --> 00:38:34,160
Speaker 4: pre twenty twenty two and so on. So what kind

636
00:38:34,239 --> 00:38:38,880
Speaker 4: of return total return would you be expecting in twenty

637
00:38:38,960 --> 00:38:41,680
Speaker 4: twenty five. Do you think it's more low single digit,

638
00:38:41,760 --> 00:38:44,080
Speaker 4: high single digits, maybe double digits even.

639
00:38:46,680 --> 00:38:49,520
Speaker 2: I think mid mid two to high singer digit.

640
00:38:50,320 --> 00:38:52,680
Speaker 4: Mid to high single digits for tree, and that will

641
00:38:52,680 --> 00:38:56,839
Speaker 4: probably be driven by what the utility sector and real

642
00:38:56,960 --> 00:38:57,880
Speaker 4: estate like you mentioned.

643
00:38:57,920 --> 00:39:03,120
Speaker 2: Then well, most mostly mostly coming from from from lower rates,

644
00:39:03,640 --> 00:39:06,000
Speaker 2: and then on on the on the credit side, maybe

645
00:39:06,040 --> 00:39:10,200
Speaker 2: some small, small tightening, but first, first, and foremost stability.

646
00:39:11,080 --> 00:39:14,120
Speaker 1: So you sound pretty upbeat generally on the outlook for

647
00:39:14,640 --> 00:39:17,880
Speaker 1: ESG debt, which is great. We all want to believe

648
00:39:17,880 --> 00:39:20,080
Speaker 1: in it. But for those who you know are reading

649
00:39:20,120 --> 00:39:22,680
Speaker 1: headlines this week along the lines of you know, ESG

650
00:39:23,200 --> 00:39:26,360
Speaker 1: ri ip it's dead, the market's gone away because of

651
00:39:26,400 --> 00:39:28,680
Speaker 1: the election in the US and because of all of

652
00:39:28,719 --> 00:39:32,520
Speaker 1: the things that people fear the next administration might do

653
00:39:32,560 --> 00:39:35,400
Speaker 1: in terms of the environmental agenda. If you if you

654
00:39:35,480 --> 00:39:38,120
Speaker 1: were talking to one of those people that kind of

655
00:39:38,120 --> 00:39:39,799
Speaker 1: losing hope, what would you say to them? How would

656
00:39:39,800 --> 00:39:41,200
Speaker 1: you left them back up? How would you get them

657
00:39:41,200 --> 00:39:41,880
Speaker 1: inspired again?

658
00:39:43,560 --> 00:39:46,279
Speaker 2: First of all, it's still some time before we see

659
00:39:46,320 --> 00:39:49,520
Speaker 2: some some changes overall. I mean, I mean the new

660
00:39:50,400 --> 00:39:53,960
Speaker 2: new legislation we could expect maybe in the in the

661
00:39:54,000 --> 00:39:57,080
Speaker 2: second half of twenty five. So there's still some some

662
00:39:57,080 --> 00:40:00,359
Speaker 2: some time to come. And and also like I mean,

663
00:40:01,040 --> 00:40:08,160
Speaker 2: on the sustainable sustainable side, we have profitable investment opportunities

664
00:40:08,280 --> 00:40:12,400
Speaker 2: and yeah, why not pursuing them? So and also looking

665
00:40:12,480 --> 00:40:16,440
Speaker 2: on the green bond market, so I mean, the dollar

666
00:40:16,520 --> 00:40:19,880
Speaker 2: market is just one third of the overall market. Here,

667
00:40:19,960 --> 00:40:23,080
Speaker 2: the focus is really on on the Euro market, and

668
00:40:23,239 --> 00:40:27,520
Speaker 2: there the commitment is still much stronger, So it's it's

669
00:40:27,560 --> 00:40:31,280
Speaker 2: not all going away in one goal.

670
00:40:32,320 --> 00:40:34,759
Speaker 1: Great stuff. Hulgar Mertin's head of Global credit at Nico

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00:40:34,760 --> 00:40:36,600
Speaker 1: Asset Management. It's been a pleasure having you on the

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00:40:36,600 --> 00:40:37,280
Speaker 1: credit edge.

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00:40:37,560 --> 00:40:38,399
Speaker 2: Thank you very much.

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00:40:38,920 --> 00:40:41,239
Speaker 1: And to Toli Alamutu with Bloomberg Intelligence, thank you so

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00:40:41,320 --> 00:40:44,080
Speaker 1: much for joining us today. Appreciate it great to be here.

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00:40:44,120 --> 00:40:46,920
Speaker 1: Thank you, James for even more analysis. Read all of

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00:40:46,920 --> 00:40:50,000
Speaker 1: Tollu's great work on the Bloomberg Terminal. Get the inside

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00:40:50,040 --> 00:40:53,400
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00:41:21,760 --> 00:41:23,880
Speaker 1: I'm James Cromby. It's been a pleasure having you join

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00:41:24,000 --> 00:41:42,600
Speaker 1: us again next week on the Credit Edge