Fixed + Floating - The Credit Podcast

Significant Risk Transfers have quietly grown into a $1T+ hedged market — now bigger than European CLOs — and they sit at the centre of how banks manage RWAs, capital, and CET1 ratios.Full analysis: ⁠https://open.substack.com/pub/fixedfloating/p/significant-risk-transfer-has-quietly?r=718tew&utm_campaign=post&utm_medium=web⁠Josef Pschorn speaks with Frank Benhamou, Partner & Portfolio Manager and Head of SRT at Cheyne Capital, about the mechanics, pricing, and cycle behaviour of SRTs — from a $1B reference portfolio walk-through to what actually happens when defaults hit and banks can't roll their hedges.Key takeaways: A bank hedging the first 80M of a 1B corporate pool can claim ~75% capital relief once the regulator agrees significant risk has transferred. Annual SRT tranche issuance now sits around $30–35B against $350–400B of hedged portfolios, implying over $1T outstanding — larger than the European CLO market. SRTs are funded insurance in tranched format — not CDS, not CLOs — with assets remaining on the bank balance sheet and the investor stepping into a true-up / true-down loss mechanism. Returns sit at cash + 6–11%, with a triple-B-equivalent average pool rating that has been materially less volatile than CLO equity through recent stress. In a downturn, banks restructure the reference pool itself — excluding chemicals, metals, or whichever sectors are under stress — rather than only paying wider spreads.Despite the bull case, SRT does not drive loan origination at the deal level. It feeds into origination only at the macro level via freed-up capital.Frank Benhamou: https://www.linkedin.com/in/frankbenhamouCheyne Capital: https://www.cheynecapital.comConnect with Fixed + Floating: https://www.linkedin.com/company/fixed-floating | https://twitter.com/FixedFloating | https://fixedfloating.substack.com/Disclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.Recorded: 01.05.2026#CreditAnalysis #FixedIncome #CorporateCredit #SignificantRiskTransfer #SRT #BankCapital #SyntheticSecuritisation #BaselIII #PrivateCredit #StructuredCredit

Covenant quality is weakening at a measurable rate, and software credits are where it is going to matter most.Full analysis: https://open.substack.com/pub/fixedfloating/p/why-software-credits-are-lme-catnip?r=718tew&utm_campaign=post&utm_medium=webJosef Pschorn speaks with Sabrina Fox of Fox Legal Training about the systematic erosion of lender protections in leveraged finance documentation and why software credits sit at the intersection of weak covenants and uniquely portable assets.Key takeaways:* LBO covenant quality deteriorated from 3.33 in 2023 to 3.53 in Q1 2026, compounding on a base that had been weakening since the early 2010s — 2024 saw a record 34 LME transactions* Software IP can be transferred to unrestricted subsidiaries, valued at board discretion without independent appraisal, and licensed back the same day — making drop-downs a low-friction exercise that standard covenant packages were never designed to prevent* Xerox circumvented its own J.Crew blocker by structuring a joint venture instead of a subsidiary, exploiting the definition of "subsidiary" as >50% voting power — a maneuver ION Platform lenders should be watching closely* Two pending court cases on creditor co-ops could determine whether lenders retain their primary collective defence mechanism against LMEs in 2026Sabrina Fox: [email protected] Legal Training: https://foxlegaltraining.com | LinkedIn: https://linkedin.com/in/sabrinafoxConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.Recorded: 17.04.2026#CreditAnalysis #FixedIncome #CorporateCredit #LiabilityManagement #SoftwareCredit #CovenantAnalysis #LeveragedFinance #DropDown #JCrewBlocker #IONPlatform #Xerox #DistressedDebt

A three-notch downgrade on a zero-default portfolio can more than double an insurer's capital requirement.Read the full investment breakdown on Substack: https://open.substack.com/pub/fixedfloating/p/when-annuities-meet-private-credit?r=718tew&utm_campaign=post&utm_medium=webCatch our first deep dive with Jakub on the PE Insurance Flywheel (Episode 3): https://fixedfloating.substack.com/p/private-credits-insurance-flywheelJosef Pschorn speaks with Jakub Lichwa of TwentyFour Asset Management about how PE-backed insurers use annuities to fund private credit exposure, why offshore reinsurance creates regulatory arbitrage, and where these capital structures begin to echo pre-2008 shadow banking patterns.Key Takeaways:Rating downgrades hit capital requirements faster and harder than actual credit defaultsPrivate placements offer an illiquidity premium that structurally matches annuity durationsAsset-intensive reinsurance enables massive capital release through offshore affiliated structuresState guaranty funds provide backstops today that were absent in the shadow banking eraFull analysis: https://open.substack.com/pub/fixedfloating/p/the-invisible-tech-moat?r=718tew&utm_campaign=post&utm_medium=webConnect with Fixed + Floating: LinkedIn ⁠https://www.linkedin.com/company/fixed-floating⁠ | X ⁠https://twitter.com/FixedFloating⁠Check out Jakub's work at TwentyFour Asset ManagementDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Host/guest views are their own. Consult professionals before investing. #CreditAnalysis #FixedIncome #CorporateCredit #PrivateCredit #Insurance #Annuities #RegulatoryArbitrage #Reinsurance #LifeInsurance #PEInsurance

Many dominant firms may be harder to disrupt today than popular narratives suggest.Josef Pschorn speaks with James Bessen of Boston University’s Technology & Policy Research Initiative about how proprietary software creates structural advantages for incumbent issuers, why AI capex may carry more tail risk than many investors assume, and how software complexity can create hidden credit risk.Key takeaways:Proprietary software becomes a true moat when scale, data, and workflow complexity reinforce one anotherAI capex may be more fragile than earlier infrastructure cyclesSoftware complexity can create regulatory and operational risks thattraditional credit analysis may missTechnology spending can act as business-model defense, not just capexFull analysis: https://open.substack.com/pub/fixedfloating/p/the-invisible-tech-moat?r=718tew&utm_campaign=post&utm_medium=webJames Bessen:TPRI at BU: https://sites.bu.edu/tpri/X: https://x.com/JamesBessenConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.Recorded: 19.02.2026#CreditAnalysis #FixedIncome #CorporateCredit #TechMoats #HighYield #ArtificialIntelligence #CompetitiveAdvantage #JamesBessen #TechCapex

A growing pool of software loans is trading below 80 as the market reassesses durability, pricing power, and AI disruption risk.Josef Pschorn speaks with Alec Keblish and Matthew Hughes of 9fin about which software credits look fragile, which still have resilience, and how investors should distinguish repricing from real impairment in software credit.Key takeaways:Loans below 80 need a more differentiated framework than simple “cheap or distressed”Software business models will not be affected equally by AIRecurring revenue and switching costs still matter, but not uniformlyInvestors need to separate spread pain from lasting impairment riskFull analysis: https://open.substack.com/pub/fixedfloating/p/40b-below-80-a-credit-analysts-framework?r=718tew&utm_medium=iosTranscripts and analysis: https://fixedfloating.substack.comConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.#CreditMarkets #HighYield #PrivateCredit #LeveragedFinance #FixedIncome #SaaS #AIDisruption #SoftwareCredit #LBOs #PrivateEquity #CreditAnalysis #DistressedDebt #9fin #BDC #TechDebt

Private credit’s pressure points are harder to see than its growth story.Josef Pschorn speaks with John Giordano of Seaport Global about BDC redemptions, PIK income, valuation marks, and what current stress signals may be telling investors about the broader private-credit market.Key takeaways:BDCs have become a major channel for private-credit riskRedemption pressure may matter more than many investors assumePIK income can obscure underlying borrower weaknessValuation marks deserve more scrutiny in illiquid marketsFull analysis: https://open.substack.com/pub/fixedfloating/p/bdcs-and-the-private-credit-puzzle?r=718tew&utm_campaign=post&utm_medium=web&showWelcomeOnShare=true Transcripts and analysis: https://fixedfloating.substack.comConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.#BDCs #PrivateCredit #PIK #BlueOwl #BlackRockBDC #CreditResearch #FixedIncome #SeaportGlobal #FixedFloating

In high yield, the highest nominal yield often produces the worst long-term result.Josef Pschorn speaks with Greg Obenshain, Partner at Verdad Capital, about why yield-chasing can damage portfolios and how a more quantitative credit framework can improve underwriting and portfolio construction.Key takeaways:The highest yields often come with the weakest outcomesSpread-chasing is not the same as good credit selectionFactor-based credit frameworks can improve resilienceDuration can behave like a form of known credit leverageFull analysis: ⁠https://fixedfloating.substack.com/p/why-79-returns-beat-139-yields-the⁠Connect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.#QuantCredit #HighYield #FixedIncome #BondMarket #FactorInvesting #FoolsYield #CreditInvesting #VerdadCapital #GregObenshain #CreditPodcast #FixedFloating

INEOS has become one of the most important issuer-specific credit stories in European chemicals.Ineos Group analysis: ⁠https://fixedfloating.substack.com/p/ineos-group-holdings-all-hinges-onIneos Quattro analysis: https://fixedfloating.substack.com/p/e4-chemicals-overcapacity-crisisJosef Pschorn speaks with Timothy Riminton of Bloomberg Intelligence about Project One, leverage, legal structure, high yields, and the refinancing pressure that matters most for bondholders and credit investors.Key takeaways:Project One is central to the INEOS credit storyLegal structure and entity-level differences matterHigh yields reflect more than just cyclical weaknessRefinancing risk may still be underappreciatedTranscripts and analysis: https://fixedfloating.substack.comConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.#ineos #ChemicalsOvercapacity #HighYield #CreditStress #ProjectOne #fixedfloating #creditpodcast

Chemicals credit is facing a difficult mix of overcapacity, weak demand, and refinancing pressure.Full analysis: https://open.substack.com/pub/fixedfloating/p/e4-chemicals-overcapacity-crisis?r=718tew&utm_campaign=post&utm_medium=web&showWelcomeOnShare=trueJosef Pschorn speaks with Timothy Riminton of Bloomberg Intelligence about the sector-level credit setup, why European issuers may be especially exposed, and what chemicals may be signaling for broader high-yield and leveraged-credit markets.Key takeaways:Global overcapacity is reshaping chemicals economicsEurope’s cost structure is pressuring margins and competitivenessWeak utilization can quickly erode EBITDA and credit qualityRefinancing pressure may still be underappreciated in spreadsTranscripts and analysis: https://fixedfloating.substack.comConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.

Private credit is increasingly shaped by insurers, BDCs, and private-equity-backed balance sheets rather than by direct lending alone.Full analysis: ⁠https://fixedfloating.substack.com/p/private-credits-insurance-flywheel?r=718tewJosef Pschorn speaks with Jakub Lichwa of TwentyFour Asset Management about how insurance capital, ALM constraints, and private-equity ownership are changing the structure of credit markets.Key takeaways:Insurers are central to private credit’s funding modelALM and solvency frameworks shape allocation decisionsPE-backed insurers create new incentive structuresMarket growth may also be building hidden fragilityTranscripts and analysis: https://fixedfloating.substack.comConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.

Official default rates can understate what is really happening beneath the surface of credit markets.Josef Pschorn speaks with Edward Altman, Professor Emeritus at NYU Stern and creator of the Z-Score, about shadow defaults, distressed exchanges, private credit, and the hidden stress that does not always show up in headline data.Key takeaways:Shadow defaults distort the real picture of credit-market stressPrivate credit may be shifting risk away from public visibilityLoan defaults and bond defaults do not always tell the same storyLoss severity often matters more than default-count narrativesTranscripts and analysis: https://fixedfloating.substack.comConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.

First Brands became a case study in how stressed credit can unravel faster than many investors expect.Josef Pschorn speaks with Jared Muroff, Head of Special Situations at Octus, about what drove the collapse, how hidden financing and liquidity pressure shaped the restructuring, and why Chapter 11 complexity matters for distressed-debt investors.Key takeaways:Hidden financingcan accelerate downsideChapter 11 mechanics matter for recoveriesRestructruing complexity can destroy more value than expectedDistressed-credit underwriting requires more than leverage analysisTranscripts and analysis: https://fixedfloating.substack.comConnect with Fixed + Floating: LinkedIn https://www.linkedin.com/company/fixed-floating | X https://twitter.com/FixedFloatingDisclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice.#CreditInvesting #FinancePodcast #MacroMarkets #FixedFloating #FirstBrands #DistressedDebt

Inside First Brands’ Collapse - Snippet

Welcome to Fixed + Floating: The Credit Podcast! 🎙️Launching this November, Fixed + Floating brings institutional credit investors in-depth conversations with leading voices in credit and macro markets. Our trailer gives you a sneak peek of the insights and strategies we’ll cover in full episodes.Listen to expert discussions on:- Credit markets and investment strategies- Macro trends shaping global finance- Interviews with industry leaders and market expertsSubscribe now on Spotify to never miss an episode: https://open.spotify.com/show/1AVhofAsVGoyC1xeIUda9K?si=4vjGpUrVQhS_KMboAsFUmgConnect with us and learn more:LinkedIn: https://www.linkedin.com/company/fixed-floating/Twitter/X: https://x.com/FixedFloating