The Credit Edge by Bloomberg Intelligence

Carvana is a rare case of lenders working together to agree restructuring terms and could be a blueprint for other distressed debt situations, according to Bloomberg News’ Erin Hudson. The used-car seller won a second chance by eliminating $1.2 billion of debt, but it still faces fundamental headwinds. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also asks Bloomberg Intelligence analyst Aidan Cheslin about the risks to Telecom Italia’s bonds as the company sells assets to reduce leverage. Cheslin also looks at the potential for Spanish tower operator Cellnex to become a rising star.See omnystudio.com/listener for privacy information.

China’s local governments are struggling to repay trillions of dollars in infrastructure debt, just as more property developers tip into distress, according to Bloomberg News’ Wei Zhou. A Chinese municipal default would send shock waves through global markets, but Beijing is at pains to avoid the moral hazard of a bailout. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also asks Bloomberg Intelligence analyst Himanshu Bakshi about the risk to Canadian banks of a spike in mortgage defaults. The main financial institutions can withstand significant real estate stress, though their bonds may come under pressure.See omnystudio.com/listener for privacy information.

Signs of life in collateralized loan obligations signal credit market healing, according to Bloomberg News’ Lisa Lee. But it’s too early to predict broad and sustained recovery as interest rate and macroeconomic risks abound. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also asks Bloomberg Intelligence analyst Stephane Kovatchev about growing stress on the container shipping sector as demand crumbles. Smaller companies are most threatened by a steep drop in freight rates after a Covid-19-era windfall.See omnystudio.com/listener for privacy information.

Bonds backed by car loans are headed for their first loss since the 1990s as Americans fall behind on payments and dealerships collapse, says Bloomberg News’ Carmen Arroyo. Consumers are burning through pandemic-era savings and hitting a wall with interest costs soaring. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also asks Bloomberg Intelligence analyst Paul Vickars about distress at Thames Water, the UK’s biggest water provider. Other companies in the sector are also running into trouble as inflation keeps rising, says Vickars.See omnystudio.com/listener for privacy information.

Canadian pensions are piling into private debt, lured by fatter returns than in corporate bonds, says Bloomberg News’ Paula Sambo. But smaller funds are struggling to raise cash for the strategy as public markets get cheaper, and there may be more private credit distress to come. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also asks Bloomberg Intelligence analyst Stephen Flynn about the telecoms and media outlook. The debt of Paramount Global trades at much wider spreads than peers, but may be due for a correction tighter.See omnystudio.com/listener for privacy information.

Troubled companies are selling assets to relieve pressure from rising rates, slumping earnings and a looming maturity wall, says Irene Garcia Perez, who covers distressed debt for Bloomberg News. But potential buyers are offering less than sellers hoped and some corporations are offloading trophy holdings to generate cash. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also asks Bloomberg Intelligence analyst Tolu Alamutu about the outlook for SBB, the Swedish company at the epicenter of a property meltdown. The crisis is getting worse by the day and has significant implications for credit markets beyond Sweden.See omnystudio.com/listener for privacy information.

Office landlords are falling behind on debt payments at the fastest rate in five years as tenants flee, says Scott Carpenter, who covers structured finance for Bloomberg News. Working from home slashed demand for office space, just as surging interest rates boost costs, spelling trouble for lenders. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also examines the impact of US culture wars on consumer companies with Bloomberg Intelligence analyst Louise Parker. Anheuser-Busch InBev’s recent collaboration with a transgender influencer slammed Bud Light sales, whacked its stock and may also dent the company’s bonds.See omnystudio.com/listener for privacy information.

More companies are going bust not long after securing cash that was supposed to save them, highlighting growing stress as rates rise and the economy slows, says Amelia Pollard, who covers distressed debt for Bloomberg News. More of these so-called liability management deals are expected to fail, making bankruptcies messier and more complex. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also quizzes Bloomberg Intelligence analyst Mike Campellone on the retail outlook, with consumers under pressure. Department stores like Macy’s and Target are poised to do better, while Under Armour is seen as a laggard.See omnystudio.com/listener for privacy information.

New accounting rules have exposed $64 billion in debt held by the largest US businesses, according to Lucca de Paoli, who covers distressed debt for Bloomberg News. This so-called supplier finance can be a safe way to manage cash flow — but it’s also been at the heart of some major corporate collapses, and could fuel ratings downgrades. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Bloomberg Intelligence analyst Sharon Chen about the outlook for SoftBank Group Corp. after it was cut deeper into junk. Elsewhere in Japan, Chen examines the refinancing risk at Rakuten Group Inc., which has $5 billion in bonds coming due.See omnystudio.com/listener for privacy information.

Private credit is having a coming-of-age moment, luring investors with double-digit returns and jumbo-sized deals, according to Silas Brown, who covers private credit for Bloomberg News. The $1.5 trillion market isn’t without risk, as borrowers grapple with surging costs and slowing earnings, while investors face liquidity and transparency challenges. In this episode of the Credit Edge Podcast, Bloomberg News senior editor James Crombie also talks to Bloomberg Intelligence credit analyst Rena Kwok about the outlook for Asian banks following heightened volatility in the sector. South Korean financial institutions are a weak link amid macroeconomic headwinds and exposure to mortgages.See omnystudio.com/listener for privacy information.