“Even when you think you’ve patched the last three holes ... what does it matter that you actually blocked one, two, and three if the company can still get there through route four?” observes Alex Diaz-Matos, Bloomberg Intelligence senior covenant analyst, on the game of whack-a-mole between creditors and borrowers in today’s bloated credit agreements. In this episode of the State of Distressed Debt podcast, Bloomberg Intelligence analysts Phil Brendel and Negisa Balluku sit down with Alex to explore the cutthroat tactics in liability management exercises and how Aston Martin, Electronic Arts, Xerox and Optimum Communications have used IP, joint ventures and novel entity structures to raise financing and circumvent seemingly ironclad lender protections. The conversation also breaks down the unintended consequences of increasingly precise drafting, the limits of non-unanimous covenant protections and how the distressed market has evolved since Serta turned theoretical vulnerabilities into harsh reality. The podcast concludes (52:34) with Phil and Negisa providing a roundup of their latest distressed credit research on Optimum Communications, Dish Wireless, Hughes Satellite Systems and Getty Images.

With the Federal Reserve confronting persistent inflation, strong demand and questions about how much further rates may need to rise, investors are also watching for potentially significant changes to the central bank’s communications and balance-sheet framework. Richard Clarida, Pacific Investment Management Co. managing director and global economic advisor and former Federal Reserve vice chair, joins Bloomberg Intelligence interest-rate strategists Ira Jersey and Will Hoffman to discuss that and more on this Macro Matters edition of the FICC Focus podcast. Clarida explains why Kevin Warsh inherited an FOMC that had already shifted sharply toward tighter policy, why eliminating formal forward guidance doesn’t mean Fed officials will stop signaling their views and why the September rate increase reflected a committee increasingly focused on bringing inflation back to 2%. The group also discusses how the Fed could shrink its balance sheet while retaining an ample-reserves regime, whether its portfolio should move toward a barbell of Treasury bills and longer-dated securities and the potential role for temporary open-market operations. They close with a discussion of how AI-related capital spending is making the economy less interest-rate sensitive and why the Fed may ultimately need to tighten further if strong demand doesn’t moderate on its own. The Macro Matters podcast is part of BI’s FICC Focus series.

Credit and high yield are in the red for the year after a two-month selloff. Will 4Q deliver gains or more losses, and why? On this episode of the Credit Crunch podcast, Mahesh Bhimalingam, Bloomberg Intelligence global head of credit strategy, discusses the results of the BI 4Q26 Investor Survey and the market outlook with George Flynn, high-yield portfolio manager at New Capital, EFG International. They cover valuations and central bank actions, along with distress and default rates. The podcast also examines survey results on investor positioning, sentiment, key return drivers, supply forecasts and relative value across asset classes (high grade vs. junk), geographies (Europe vs. US), ratings and sectors. 

Asset allocators should prepare for continued bouts of volatility, as negative asymmetry in market fundamentals, valuations and technicals is causing investors to trim equity exposure and move up the capital stack. Trevor Slaven, Global Head of Asset Allocation and Multi-Asset Portfolio Solutions at Barings, joins Damian Sassower, Bloomberg Intelligence’s Chief EM Fixed Income Strategist, to assess the AI-induced transformation taking place across the global economy. Slaven and Sassower explore the impact of IT-related capital expenditure on labor markets, inflation expectations and corporate margins, with high-beta asset classes exposed to greater downside risk. Listen to this episode on Apple Podcasts and Spotify.

With global bond yields at multi-decade highs and markets pricing further central-bank tightening, investors are reassessing the relative value of rates, equities and currencies. Christian Lawrence, chief cross-asset strategist at Rabobank, joins Bloomberg Intelligence chief US interest rate strategist Ira Jersey to discuss that and more on this Macro Matters edition of the FICC Focus podcast. Lawrence argues that the recent surge in Treasury yields has been driven more by real rates and strong growth than by rising inflation expectations, and says the latest move increasingly resembles a pain trade that could partially reverse. The two discuss how higher yields are already weighing on market breadth beneath equity indexes, why large-cap companies with strong free cash flow may remain better positioned and how changing hedge ratios and interest-rate differentials are influencing the dollar. They also examine whether markets are pricing too many rate hikes from the Federal Reserve and other major central banks, the global trend toward looser fiscal policy and why relative-value trades may offer better opportunities than outright directional bets while volatility remains elevated. The Macro Matters podcast is part of BI’s FICC Focus series.

“You want to buy the security based on this yield, but you have to protect against the risks,” says Mike Vranos, CEO and founder of Ellington Management Group. “What you see is many investors just ignore the option they’re short or, in the extreme example, they ignore the left tail risk,” Vranos adds when discussing how to deliver alpha in securitized products. He joins Bloomberg Intelligence’s Erica Adelberg and Noel Hebert on the latest episode of Credit Crunch to discuss innovation in the mortgage-backed market during his time at Kidder Peabody and later at Ellington, the rise of non-qualified mortgages and the merits of CLO equity. The three discuss the role of insurance capital, investment discipline and where value resides in the current landscape, before closing on the importance of philanthropy. The Credit Crunch podcast is part of BI’s FICC Focus series.

“’Co-op first, ask questions later’ is down a bit from its peak, though not dead,” observes John Sobolewski, Global Chair of Latham & Watkins’ Liability Management Practice, as he addresses the latest dynamic between debtors and lenders in distressed situations. In this episode, Bloomberg Intelligence analysts Negisa Balluku and Phil Brendel sit down with John to explore the current state of Liability Management Exercises (LMEs) and why stakeholders are ultimately motivated to find negotiated resolutions over value-destroying, multiyear litigation. The conversation unpacks the delicate mechanics of these negotiations, including why repeat market players will give minority holdouts a fair shake but “hold the line” against nuisance value to avoid giving an inch that turns into a yard. John also breaks down the massive bid-ask spreads — think “Grand Canyon” — between debtors and creditors, why debt funds continue to resist taking back equity, and the software sector’s growing interest in LM solutions.  The podcast concludes (53:10) with BI’s Noel Hebert joining Negisa and Phil for a roundup of their latest research on Air Baltic, QVC, DISH DBS, DISH Wireless, Hughes Satellite Systems, Telesat, and Xerox. The State of Distressed Debt podcast is part of BI’s FICC Focus series. Listen on Apple Podcasts and Spotify.

With AI investment accelerating, energy costs rising and Treasury yields pushing to multi-decade highs, investors are confronting a market where few assets look obviously cheap. Jimmy Chang, chief investment officer of Rockefeller Global Family Office, joins Bloomberg Intelligence chief US interest rate strategist Ira Jersey to discuss that and more on this Macro Matters edition of the FICC Focus podcast. Chang explains how the extraordinary scale of AI-related capital spending is supporting economic growth while also adding inflation pressure through shortages of power, semiconductors and other inputs. The two discuss why 10-year Treasury yields above 5% may be consistent with strong nominal growth, when extending duration could become attractive and how additional Federal Reserve tightening might ultimately slow the economy. They also examine the record amount of cash in money-market funds, why Chang doesn’t view it simply as “dry powder” and how higher yields are reinforcing a K-shaped economy. The episode closes with a longer-term discussion of AI investment, potential overcapacity, power demand and why family-office portfolios may benefit from diversification across bonds, precious metals and other hard assets. The Macro Matters podcast is part of BI’s FICC Focus series. 

With the Federal Reserve beginning a new tightening cycle and markets pricing additional rate increases, investors are reassessing where the Treasury yield curve may be headed next. Ira Jersey, Bloomberg Intelligence chief US interest-rate strategist, discusses this and more in a solo Macro Matters edition of the FICC Focus podcast. Jersey explains why Chairman Kevin Warsh’s latest press conference offered a clearer view of the Fed’s reaction function, with resilient economic growth allowing policymakers to focus more directly on above-target inflation. Jersey outlines why BI expects another 50 bps of tightening, though likely at a slower pace than markets currently price, and examines how previous Fed cycles suggest further curve flattening could follow the first hike. Jersey also discusses why two- to five-year Treasuries may offer attractive carry and downside protection as the curve flattens, how inflation expectations will influence the Fed’s next moves and why solid nominal growth continues to support relatively high long-term Treasury yields. The Macro Matters podcast is part of BI’s FICC Focus series.

“We want to encourage risk-taking, but we want to encourage the right type of risk-taking, which is informed risk-taking,” says Colin Purdie, global CIO of public markets for Manulife Investment Management. In this episode of Credit Crunch, Purdie joins Bloomberg Intelligence’s Noel Hebert to discuss portfolio construction and decentralized decision-making within a global platform. The two explore the material growth in equity and credit issuance to fund data centers, where the benefits of AI may accrue, why physical climate risk could be mispriced and where to find relative value. Purdie also explains why the 2022 gilt crisis was an important lesson, offers thoughts on whether de-dollarization is done or delayed, and speaks to the source of demand for corporate new issuance and the potential effect of a less-transparent Federal Reserve. The Credit Crunch podcast is part of BI’s FICC Focus series. Listen on Apple Podcasts and Spotify.