FICC Focus Credit Crunch: Iran War, Software Rout and Credit a Safe Haven
14 snips
Mar 11, 2026 Sarah Harrison, senior portfolio manager at Allspring Global Investments with leveraged finance expertise. They discuss the Iran war timeline and its market impact. Credit’s role as a safe haven versus rates and equities. The tech-driven pre-war wobble, contagious private credit risks, and where value shows up across high grade, high yield and loans.
AI Snips
Chapters
Transcript
Episode notes
High Quality Single Bs Are The Key Hunting Ground
- Sarah prefers single-B bonds as the core hunting ground, finding high-quality single Bs in the 5–6% yield range.
- She describes the single-B market as bifurcated between solid businesses and stressed tail names, favoring the former.
Single Bs Look Cheap Relative To Higher Ratings
- Mahesh reports single Bs are cheap relative to BBs and BBBs (98th percentile) while BBBs trade tight versus higher ratings.
- Sarah's IG team prefers A-rated over BBB because BBB valuations aren't attractive ahead of potential hyperscaler issuance.
Credit Is A Relative Safe Haven Versus Rates
- Sarah and Mahesh argue credit has acted as a safe haven versus sovereign rates, with credit returns ~3x less volatile than rates.
- They attribute this to better visibility of company cash flows now terminal rates are clearer.