BlackRock's Rieder Says There Is Still a Big Demand for U.S. Credit

The video discusses the dynamics of European and US credit markets, highlighting the high demand for US credit despite expensive hedging costs. It explores market distortions caused by US companies liquidating overseas holdings and the opportunities these present. The video also covers investment strategies focusing on short-term corporate bonds and the impact of rising rates on spreads. Additionally, it examines the market for leveraged loans and floating rate debt, emphasizing the need for careful selection due to changing covenants and market conditions.

What is a significant challenge for European investors in the US credit market?

• Excessive regulation

• Low demand for US credit

• High hedging costs

• Lack of investment opportunities

What market distortion is caused by US companies liquidating their overseas holdings?

• Distorted yields on shorter dated US credit

• Increased demand for long-term bonds

• Stabilized currency exchange rates

• Decreased interest in equities

Why are investment firms like BlackRock interested in the front end of the corporate bond curve?

• Higher yields compared to long-term bonds

• Lower risk of default

• More predictable interest rates

• Increased liquidity and repatriation dynamics

What is a potential benefit of investing in leveraged loans?

• High liquidity

• Fixed interest rates

• Guaranteed returns

• Floating rate structure

What is a concern when investing in floating rate debt?

• High fixed interest rates

• Weakening covenants

• Lack of market demand

• Limited availability