From Iran Tensions to AI Ventures: The Credit Market Perspective

Hosts Shankar Ramakrishnan and Bruce Clark are joined by Dave Corbell to discuss the state of US and European primary credit markets amid volatility tied to the Iran conflict, inflation concerns, private credit risks, and shifting rate expectations.They note heavy front-loaded issuance as banks push borrowers to seize brief market windows, with the US posting a record $651bn investment-grade first quarter and Europe also seeing a record Q1, while spreads have widened only mildly and often tighten when supply slows.Demand remains strong with cover ratios above four times, though higher Treasury yields and rising new-issue premiums lift borrowing costs. They discuss risk-on behavior despite negative headlines, changing rate-cut versus hike pricing, a slowdown in European high yield, emerging market issuance strength, refinancing risks from COVID-era debt, and signs of strain in some structured finance assets without clear systemic fallout.