Latest news with #creditmarket
Reuters
8 hours ago
- Business
- Reuters
JPMorgan Chase sees growth in Asia Pacific private credit market
SINGAPORE, June 5 (Reuters) - JPMorgan Chase (JPM.N), opens new tab sees significant growth potential in Asia Pacific's private credit market, focusing on countries across Asia and including Australia and India, Serene Chen, the bank's Asia Pacific head of credit, currency, and emerging market sales, said on Thursday. The U.S. bank has been actively building its private credit business in the region since 2019, targeting mid-sized companies without investment-grade ratings but with strong fundamentals, she said. Globally, tariff uncertainty and market volatility have sent some companies to seek private credit as a flexible funding alternative to traditional lenders, benefiting the $2 trillion private credit industry, which has grown from $500 million over the past decade, according to analysts. In February JPMorgan Chase announced that it would allocate another $50 billion for its direct lending push as the bank looks to expand its foothold in the rapidly growing private credit market. "Asia is driving over 50% of the world GDP growth, and we have some of the biggest economies in the region," Chen said on Thursday. "And our overall debt market in Asia, in public format, is only about $1.5 trillion and the GDP growth is strong, and in private credit, from the deal size we have seen, it's probably only about $200 billion every year or so for the last two years so has a large gap to catch up so we see it's still at the beginning stage of Asia private credit market," she added.
Zawya
4 days ago
- Business
- Zawya
Aramco underlines bid for long-dated credit: IFR
Saudi Aramco returned to the conventional US dollar market on Tuesday with a US$5bn three-part deal, with the 30-year tranche accounting for nearly half the amount raised in spite of further swings at the long end of the Treasury curve. It was the latest sign that investors are keen to buy 30-year debt or longer from blue-chip corporates, with recently placed long-dated bonds from Alphabet, Siemens and Snam also proving popular. AT&T followed suit on Wednesday with a US$1.25bn long 31-year note as part of its US$3.5bn triple-tranche transaction. These bonds are being snapped up even though 30-year government bond yields have been particularly volatile over the past couple of weeks as concerns mount over the fiscal outlook in the US and Japan. The differing fortunes of the credit and rates markets tell their own tale and show how bond markets have been turned on their head. "Long-end credit has definitely been more stable," said a banker involved in the Aramco trade. "It's tended to outperform rates moves." For credit investors the incentives are clear. Spreads are tight and the outlook is uncertain. "Yet yields look pretty attractive historically, and that is what is enticing buyers into the market," said Eddie Hebert, client portfolio manager at PPM America. "You still have a lot of long-term buyers that need to buy this asset class to get that yield." The effective yield on the ICE BofA 15+ Year US Corporate Index was just over 6% as of May 27. "People like nice round numbers, and the yield on the long corporate index is 6%,' said Tom Murphy, head of US investment-grade credit at Columbia Threadneedle. 'So as the long end of the Treasury market gets a little bit unhinged, I think that that 6% yield for long corporates is just really something that the yield buyers really find attractive, and there just hasn't been a lot of it.' Rarity value The relative dearth of long-dated corporate supply has been a big reason why investors are so keen to buy these bonds in the primary market. Aramco, for example, was the first corporate borrower from Central and Eastern Europe, Middle East and Africa to sell a 30-year senior bond in the US dollar market this year. The oil giant raised US$2.25bn through its 6.375% June 2055s, which came alongside US$1.5bn 4.75% June 2030s and US$1.25bn 5.375% June 2035s. All three tranches priced in line with fair value, with the deal coming on a day in which Treasuries were rallying. For Aramco, the tenor fitted its strategy of managing its assets and liabilities. "We've seen that for a number of oil and gas companies that have capex-heavy businesses with super long-life assets it makes sense to have longer-dated debt," said the lead banker. Yet long-dated bonds are not for every corporate, especially when the 30-year Treasury is hovering around the 5% mark and the yield could yet go higher. "We haven't seen a 5% yield on the 30-year US Treasury in many years [with a brief exception in October 2023] and so it is the tenor of choice for most investors right now," said Scott Schulte, global co-head of investment grade syndicate at Barclays. "There is incredible demand. "The flip side is that issuing a 30-year with a 5% base rate and effectively leaving it on the books until it matures or they can call it is a tougher sell for CFOs." For investors, too, it's not a zero-sum game even if the headline numbers look attractive. 'It might sound counterintuitive but at some point in time, high yields become a distraction and not actually a positive for our marketplace," said Murphy at Columbia Threadneedle. 'Because if that [higher yield] means that people are starting to get really concerned about this fiscal situation, they're starting to get really concerned that the inflationary impact of tariffs is coming, then I think people's focus will be on that, as opposed to, 'remain calm, all is well – let's just focus on yields'. "Yield buyers like higher yields, but they like higher stable yields,' he said. "And so far in this kind of slow move higher, that's what it's been. But every time we get these bouts of volatility, that's when the yield buyers step back.'
Bloomberg
24-05-2025
- Business
- Bloomberg
Junkiest Junk Is Offering a Warning Sign for Debt
For much of the year, money managers have embraced optimism and snatched up corporate bonds, sending valuations to ever more expensive levels. Now, Wall Street titans are saying it's time to focus on how bad things can get. Jamie Dimon, chief executive officer of JPMorgan Chase & Co., and Josh Easterly, co-founder and co-chief investment officer of Sixth Street Partners, are among those warning that the credit market may not be pricing in enough risk. And the lowest rung of junk bonds are flashing warnings that the US economy could soon face slower growth and higher inflation, as well as the possibility of a recession.
Bloomberg
19-05-2025
- Business
- Bloomberg
Morningstar CEO Sees Private Credit as Avenue to Take On Rivals
Morningstar Inc. is trying to make its mark by rating loans within the $1.6 trillion private credit market, which could help the firm take on rivals Fitch Ratings, S&P Global Ratings and Moody's Ratings. Those three large firms have dominated public credit ratings, because money managers buying conventional corporate bonds usually need ratings from at least two of them under rules in their investment policy statements.
Bloomberg
07-05-2025
- Automotive
- Bloomberg
US Consumer Borrowing Rises Most in Three Months in Broad Pickup
US consumer borrowing increased in March by the most in three months, reflecting a pickup in credit-card balances as well as a solid rise in motor vehicle and other non-revolving loans. Total credit climbed nearly $10.2 billion after falling a revised $614 million in February, according to Federal Reserve data out Wednesday. The median projection in a Bloomberg survey of economists called for a $9.4 billion rise. The monthly figures cap a quarter that saw the smallest annualized gain in credit in nearly a year.
