Making Sense How are geopolitics and AI trends impacting leveraged finance?
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Mar 11, 2026 Tarek Hamid, head of North American credit research & strategy who analyzes geopolitics, energy and AI impacts on credit. Kevin Foley, global head of capital markets who runs issuance and market strategy. They discuss how Middle East conflict and oil swings feed into rates and spreads. They explore which industries AI may reshape, market appetite for new supply, and M&A’s role in 2026 issuance.
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AI Spurs Winners, Losers And Industry Consolidation
- AI is creating large winners (data centers, power, semiconductors) and potential disruption for parts of software and professional services.
- Tarek Hamid warns many software companies still have moats, so AI may spur consolidation rather than uniform decline.
Geopolitical Risk Is Repricing Rate Cut Odds
- Rising rates expectations and oil-driven inflation risk are reducing the odds of the Fed cutting as many times as markets priced.
- Kevin Foley links Strait of Hormuz concerns to higher oil and a 20bp move in the U.S. 10-year.
Investor Appetite Keeps Spreads Tighter Than Expected
- Investors remain hungry for new high-yield and high-grade paper despite uncertainty, keeping spreads relatively tight.
- Tarek Hamid notes high yield spreads at ~320bps and high grade inside 100bps, unchanged amid recent events.