KKR is looking to Europe and Japan for yield as US debt spreads grind tighter. “Investors are very focused on relative value in a market where there’s not a lot,” Tal Reback, global investment strategist for the firm’s credit and markets business, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s David Havens in this episode of the Credit Edge podcast. “In general, investors are much more intrigued about how to diversify geographically,” she adds. They also discuss what KKR thinks could be a $1 trillion European asset-backed debt opportunity, private credit default risk, valuations of direct loans, sector bets and business development companies.

See omnystudio.com/listener for privacy information.

The technology-funding frenzy could become a bust for credit markets if AI falls short of lofty expectations, according to Barclays. “If we get to a point where we see a lot of this issuance coming to the market — and then there’s some changes, where maybe certain things are a little bit less viable or a little bit less attractive — that leads to some downside risks,” Brad Rogoff, the firm’s global head of research, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Mike Campellone in the latest Credit Edge podcast. They also discuss “late-cycle” behavior, private-debt risk, asset-based finance and portfolio trades, as well as Barclays’ 2026 forecasts for credit spreads, defaults and global issuance.

See omnystudio.com/listener for privacy information.

Global investors are looking more at European private credit as US returns get squeezed, according to London-based hedge fund Arini. “They want to focus on a place where they think there’s rule of law, where they think there’s opportunity set — and that’s really been Europe,” Mathew Cestar, the firm’s president, tells Bloomberg News’ James Crombie and Bloomberg Intelligence’s Stephane Kovatchev in the latest Credit Edge podcast. Europe pays about 50 basis points more on private loans than the US to compensate for its relative complexity, says Cestar, who leads the Arini’s direct lending business. The firm generates additional spread by focusing on middle-market, non-sponsor deals across the continent. Cestar also discusses credit agreements, defaults, the potential for investment in defense and where by country and sector he sees the best opportunity.

See omnystudio.com/listener for privacy information.