Moody’s Talks – Behind the Bonds

Our view of credit fundamentals – a mix of financial and business conditions – has turned increasingly negative across sectors. We examine why industries like airlines and retail are under strain, while others like aerospace and defense are staying afloat. Hosts: Tania Hall, Senior Research Writer, Moody’s Ratings; Tom Coghlan, AVP-Research Writer, Moody’s Ratings  Guests: Sven Reinke, Managing Director, Corporate Finance Group, Moody’s Ratings; Frederic Duranson, Vice President - Senior Analyst, Corporate Finance Group, Moody’s Ratings Related research:Aerospace & Defense – Global: Outlook remains positive on sustained demand despite tariff, supply chain effects, 3 June 2025Airline – Global: Outlook negative as growth in demand for travel stalls amid rising economic concerns, 30 May 2025Retail & Apparel – Global: Outlook turns negative as companies and consumers contend with tariff uncertainties, 14 April 2025

Increasing use of artificial intelligence (AI) is spurring massive investment in data centers, which could top $2 trillion in the next four years. But huge energy requirements and uncertainties over future computing needs may pose long-term credit risks to developers, landlords and investors.  Host: Louis Hau, Vice President - Senior Research Writer, Moody’s Ratings Guests: John Medina, Senior Vice President, Moody's Ratings; Ryan Wobbrock, Vice President - Senior Credit Officer, Moody’s Ratings Related research:moodys.com/datacentersData Centres – Europe: Capacity to double by 2028, but energy access and regulation may constrain growth, 14 April 2025Data Centers – Global: 2025 Outlook – Developer leverage, regulatory risk to rise as growth surges, 14 January 2025  

From Tesla to Netflix, innovative technologies and market-disrupting products are still grabbing the attention of consumers and investors. In a rapidly changing market environment, we look at how to identify true disrupters at an early stage and how their credit quality evolves. We’ll also dive into industries being shaken up by disruptions: new weight loss drugs in the pharmaceutical sector and the impact of AI startup DeepSeek on Chinese technology companies. Hosts: Jeff Pruzan, VP, Senior Research Writer - Moody’s Ratings; Livia Yap, VP, Senior Research Writer - Moody’s Ratings Guests: Peter Abdill, MD, Corporate Finance Group - Moody’s Ratings; Shawn Xiong, VP, Senior Analyst - Moody’s Ratings Related research:Top of Mind - Corporates April 2025Corporates – Global: ‘Disrupters’ can benefit from innovation even before their credit metrics catch up 

US tariffs threaten a potential global trade war. Recent weeks have seen frequent shifts in US policy on tariffs as well as the announcement of counter moves from trade partners. What are the likely consequences for credit across different sectors of the US economy and more broadly across global markets? Guest: Paloma San Valentin, Managing Director - North America Corporate Finance, Moody's’ Ratings Host: Jeff Pruzan, Vice President, Senior Research Writer, Moody’s Ratings  To read more on this topic, visit the Behind The Bonds page on Moodys.com (some content only available to registered users or subscribers). Related Research:Tariffs – Global: $3 trillion of trade at risk from tariffs on closest US trading partnersTrade – China: Electronic, machinery and equipment sectors more exposed to impact from US tariffsCorporates – North America: Tariffs are credit negative for a wide swath of sectors, although some would benefit  

Moody’s first Private Credit Outlook predicts that this market will double by 2028 to more than $3 trillion of assets under management. Private credit should benefit from more volatile market conditions and from innovation which is attracting new kinds of customer but also generating new risks.Later in the episode, we look in depth at the surge in retail investor involvement in private credit.Guests: Marc Pinto, Managing Director, Corporate Finance Group, Moody’s Ratings; Christina Padgett, Associate Managing Director, Corporate Finance Group, Moody’s Ratings; and Alexandra Aspioti, Senior Analyst, Corporate Finance Group, Moody’s RatingsHost: Tania Hall, Senior Research Writer, Moody’s RatingsTo read more on this topic, visit Behind The Bonds page on Moodys.com (some content only available to registered users or subscribers).Related research:Private Credit — Global: 2025 Outlook – Primed for growth as LBOs revive, ABF opportunities accelerateFinancial Institutions – Europe: Revamped ELTIF legislation unlocks growth for the European private credit marketBusiness Development Companies – US: Q3 2024 Update: Rate cuts will further erode net investment income; rise in nonaccruals pausesFinancial Institutions – North America: Private credit ETFs will use public credit for liquidity, a potential performance challenge

The outlooks for corporates in North America, Latin America, China, Asia-Pacific and EMEA are now all stable. We discuss the drivers shaping those outlooks and the similarities and differences across regions. Then we’re taking a deeper dive into the improving credit fundamentals for global leveraged finance next year as interest rates decline and defaults ease.Guests: Paloma San Valentin, Managing Director - North America Corporate Finance , Moody’s Ratings and Jeanine Arnold, Senior Vice President – Senior Analyst – Corporate Finance Group, Moody’s RatingsHost: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s RatingsTo read more on this topic, visit Behind The Bonds page on Moodys.com (some content only available to registered users or subscribers).Related research:Leveraged Finance – Global: 2025 Outlook – Improving credit conditions will boost deal flow, but risks to persistNonfinancial Corporates – Latin America & Caribbean: 2025 Outlook – Stable on mixed growth, but operating environment implies hazardsNonfinancial Corporates – EMEA: 2025 Outlook - Stable on lower rates, moderate growth, but geopolitics weighNonfinancial Corporates – Asia-Pacific ex China (APAC): 2025 Outlook – Stable on growth, easing interest rates, despite geopolitical tensionsNonfinancial Corporates – China: 2025 Outlook – Stable amid stronger stimulus, but geopolitical risk has climbedNonfinancial Corporates – North America: 2025 Outlook - Stable as inflation wanes but stressed consumers, geopolitics add risk

In the opening segment, we discuss how a host of factors including substantial AI investment underpin our positive outlook for the global diversified information technology sector over the next 12-18 months. Then at 10 minutes, we assess which types of technology companies stand to benefit from all of this AI investment more than others.Guests: Raj Joshi, Senior Vice President, Global Corporate Finance Group, Moody’s Ratings and Vincent Gusdorf, AMD - Digital Finance and AI Analytics, Moody’s Ratings.Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s RatingsTo read more on this topic, visit Behind The Bonds page on Moodys.com (some content only available to registered users or subscribers).Related Research:Diversified Information Technology – Global: Outlook positive as profits strengthen in steady macroeconomic environmentArtificial Intelligence – Global: Profits from AI remain elusive but some sectors hold more promise than others

M&A activity remains robust across corporate sectors, including pharmaceuticals, homebuilding, mining and telecommunications. In our opening segment, we focus in part on how the green transition is driving deals in the mining segment as companies look to control critical minerals used in renewable energy technologies. In our second segment (10:10), we delve into prospects, including M&A, for large US telecommunications and cable companies. Companies are increasingly battling for high-speed data customers, partly due to the boom in streaming video. Yet the market is saturated with little differentiating the services.Guests: Tobias Wagner, Vice President – Senior Credit Officer, Global Corporate Finance Group, Moody’s Ratings and Emile El Nems, Vice President – Senior Credit Officer, Global Corporate Finance Group, Moody’s RatingsHost: Tania Hall, Senior Vice President – Senior Research Writer, Moody’s RatingsTo read more on these topics, visit Moodys.com (some content available only to registered users or subscribers).Related Research:Corporates – North America: IG companies are well-positioned for rising but less transformational M&ATelecommunications – US: Competition intensifies as telco, cable try to justify network costs in saturated market

India's large domestic market shields its companies from external shocks, whereas Indonesia's export-dependent commodity sector prompts government efforts to diversify growth.Guests: Rachel Chua, VP-Senior Analyst; Sweta Patodia, AVP-AnalystHost: Vittoria Zoli, Analyst, Credit Strategy & Guidance, Moody's RatingsRelated Research:Nonfinancial Companies – India and Indonesia: Credit quality will remain robust, even as earnings trajectory divergesNonfinancial Companies – Southeast Asia Dollar bond issuance will regain momentum when US interest rates begin to fallNonfinancial Companies – India: Offshore funding indispensable despite improving domestic liquidity

This month our analysts are discussing what’s driving our still positive outlook for the global aerospace and defense sector for the next 12-18 months. Defense budgets are up as a result of rising geopolitical tensions and we expect strong operating profit for these companies. But persistent supply chain issues are delaying the delivery of new planes from the largest manufacturers Boeing and Airbus, even as air travel demand soars. Guests: Frederic Duranson, Vice President – Senior Analyst - Corporate Finance Group, Moody’s Investors Service and Jonathan Root, Senior Vice President – Senior Analyst – Corporate Finance Group, Moody’s Ratings Service.Host: Tania Hall, Senior Vice President – Senior Research Writer, Moody’s Investors Service. To read more on this topic, visit Behind The Bonds page on Moodys.com (some content only available to registered users or subscribers).Related Research:Aerospace and Defense – Global: Outlook remains positive despite lingering post-pandemic problemsGeopolitical risk – Europe: Higher defence spending will strain budgets, but is credit positive for companiesBoeing Company (The): Acquisition of Spirit AeroSystems will be positive for Boeing’s operations over the long runSovereigns – Europe: Some EU sovereigns will face accumulating debt pressures and hard policy choicesAirbus SE: Revised 2024 earnings guidance is credit negative

The pharmaceutical market has exploded in recent years with the rise of new drugs to help treat obesity and diabetes. The shift marks a huge opportunity for the pharmaceutical sector, which is pursuing the diabetes and obesity markets with four blockbuster drugs today: Ozempic and Wegovy from Novo Nordisk, and Mounjaro and Zepbound from Eli Lilly. In the first segment Mike Levesque looks at credit implications for the pharmaceutical industry, whose weight-loss drugs will generate some $80 billion in annual sales by 2030. Then at 11:10 minutes, Linda Montag discusses how the rise of the weight-loss drug segment will affect the packaged food, restaurant and packaging sectors.Guests: Michael Levesque, Senior Vice President, Corporate Finance Group; Linda Montag, Senior Vice President, Corporate Finance Group. Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s Investors Service.To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)Cross-Sector – Global: Growth in obesity drugs will affect multiple industries but impact will take years

The commodities sector isn’t looking rosy and that is largely due to the outsize influence of China, which is currently in the grip of an economic slowdown. These pressures come on top of geopolitical damage to trade and supply chains, and the energy transition which is increasing global appetite for some commodities and eroding it for others. Our analysts look in particular at the fortunes of steel and commodity chemicals – both of which are seeing plunging demand from China. Later in the episode (at 12.49 mins) we also look more closely at gold. Investors are riding record highs for this very particular commodity, a traditional investment ‘safe haven’ whose idiosyncratic behaviour sometimes ignores the normal rules. Guests: Hui Ting Sim, Associate Vice President – Corporate Finance Group, Moody’s Ratings; Mike Zhu, Vice President – Senior Analyst – Corporate Finance Group, Moody’s Ratings; Jamie Koutsoukis, Vice President – Senior Analyst – Corporate Finance Group, Moody’s RatingsHost: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s RatingsTo read more on this topic, visit the Macro Views page on Moodys.com (some content only available to registered users or subscribers). 

The outlook for the global real estate market remains negative with the bumpy economy, tight financing conditions and the surge in remote work. In the US, we expect rental income growth for offices to remain poor overall and apartment income growth to moderate this year with supply up, mostly in parts of the Sunbelt. Globally, Japan is a bright spot with supply-demand dynamics in the commercial market relatively stable. In Europe, the commercial market remains at risk of further deterioration, but the UK is likely to recover quicker as asset prices have fallen at a faster pace.Guests: Lori Marks, Vice President - Senior Credit Officer, Global Corporate Finance Group and Ana Luz Silva, Vice President - Senior Analyst, Global Corporate Finance Group Host: Tania Hall, Senior Vice President - Senior Research Writer, Moody’s RatingsTo read more on this topic, visit Moodys.com (Some content available only to registered users or subscribers.):Related Research:Real Estate – Global: Outlook remains negative as high funding costs persist and the economy slowsReal Estate – US: CRE fortunes vary by lender and property type, with office facing multiple risksHousing and Housing Finance – US: Homeowners with low rates stay put, keeping housing in a holding patternReal Estate – Europe: Credit quality still at risk despite improving sentiment; greater divergence likelyCommercial Real Estate – UK: Recovery set for second half of 2024, but pockets of distress will persist

In our opening segment, we discuss the slight slowdown in global market share growth for battery electric vehicles (BEVs) as some incentives to buy have ended, yet prices remain high. A scarcity of charging stations in Europe and the US also remains a deterrent for consumers. Our second segment, which starts at 9:40, focuses on the charging shortage and who will pay for expansion.Guests: Matthias Heck, Vice President - Senior Credit Officer, Global Corporate Finance Group and Rene Lipsch, Vice President - Senior Credit Officer, Global Corporate Finance GroupHost: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s RatingsTo read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)Related Research:Auto Manufacturing – Global: Vehicle volume growth to be muted after last year’s strong finishAutomotive Manufacturing – EU & US: Charging network build-out must speed up to support EU, US automakers’ EV plansAutomotive Manufacturing – Global: Compliance risks in emission and safety regulations are becoming more evidentFuel Retailers – Global: Electrification will erode market dominance, investment to curb cash flow

Artificial Intelligence or AI is predicted to have a profound impact on many areas of business. In this episode of Behind the Bonds we assess where AI innovation is already showing significant potential. Which industries can expect to see improved productivity and what are the potential timelines for any positive impact on credit quality? We also discuss the disruptive potential of these new technologies and the risks to jobs.Later in the episode our colleagues look in more depth at the media, where AI’s potential is presenting opportunities and generating both opposition and collaboration from content creators.Guests: Francesco Bozzano, Vice President – Senior Analyst, Global Corporate Finance Group and Agustin Alberti, Vice President – Senior Analyst, Global Corporate Finance Group.Host: Tania Hall, Senior Vice President – Senior Research Writer, Moody’s Investors Service. To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)Related Research:Nonfinancial corporates – Global: Market leaders in data-rich sectors will gain most from AI advancesDigital Transformation – Global: 2024 AI Outlook – Swift progress likely but rapid roll-out will bring risksMedia & Publishing – Cross Region: GenAI should benefit media companies, mainly by boosting productivity

In 2024 we see an uneven picture for companies across the globe. For those in North America and Asia-Pacific, excluding China, the credit outlook is stable. But in Europe, the Middle East and Africa, and Latin America the outlook is negative. Driving this testing global environment are higher for longer interest rates which are raising the cost of borrowing and re-financing. This is a particular challenge for speculative-grade companies. Higher rates are also weighing on consumer demand in some sectors, particularly real estate.  Later in the episode at 11.30mins, our colleagues in Hong Kong take a closer look at prospects for companies in China, in recent decades the driver of the global economy, but facing a negative credit outlook for 2024. Guests: Myriam Durand, Managing Director, Global Corporate Finance Group and Gloria Tsuen, Vice President, Senior Credit Officer, Global Corporate Finance Group. Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s Investors Service.   To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)  Links: Global Outlook SegmentNonfinancial Companies – North America: 2024 Outlook - Stable on relatively robust growth, even as high rates drive riskNonfinancial Companies – APAC ex China: 2024 Outlook - Stable on sustained growth in large, domestic-focused economiesNonfinancial Companies – EMEA: 2024 Outlook - Negative as higher rates bite and consumers remain cautiousNonfinancial Companies – Latin America & Caribbean: 2024 Outlook - Negative amid high rates, slow growth and subdued commodity pricesChina SegmentNonfinancial Companies – China: 2024 Outlook - Negative amid lower growth and prolonged property downturnCross Sector – China: China will be more selective in providing support to state-owned enterpriseCross Sector – China: Slowing growth intensifies spillover effects of long property market downturnMacroeconomics– China: Medium-term growth outlook will reflect effectiveness of economic rebalancing   Credit Conditions – China: Soft economic recovery heightens contingent liabilities from LGFV debt risks

This year has been a very weak one for leveraged finance deals as aggressive global monetary tightening hit markets. In this episode we explain why we see a gradual improvement in 2024, with refinancings driving new issuance in the US and EMEA. Guests: Chris Padgett, Associate Managing Director of North America Leveraged Finance Research and Jeanine Arnold, Senior Vice President of Leveraged Finance, EMEA. Host: Tania Hall, Senior Vice President – Senior Research Writer, Moody’s Investors Service.To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.) Related Links:2024 Outlook – Growing refinancing needs, higher-quality LBOs, will drive new issuance

Retailers in North America and Europe are looking forward to another bustling holiday shopping season—but consumers may not be as eager this year as stores have hoped amid fairly high inflation, even with a strong labor market. Will 2024 get any better for retailers and makers of apparel? Later we look at the global transport sector—where container shipping continues to struggle, even while other modes of transportation look for improved earnings in 2024.Guests: Christina Boni, Senior Vice President; Mickey Chadha, Vice President-Senior Credit Officer; and Daniel Harlid, Vice President-Senior Credit Officer, all from the Corporate Finance Group of Moody’s Investors Service.Host: Tania Hall, Senior Vice President – Senior Research Writer, Moody’s Investors Service.To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)Related Research:Retail & Apparel – Global: Recovery delayed to 2024 as inflation fatigue hurts spending; outlook still stableRetail & Apparel – Global: Outlook is stable as profits set to recover from lower costs and inventory realignmentRetail – US: Stronger than expected September retail sales pushes Q3 higher, but year to date spending remains mutedRetail & Apparel – EMEA: Quarterly Update: Trading conditions remain difficult despite some retailers' positive resultsTransportation – Global: Outlook stable despite weakening business conditions for container shippingShipping – Global: Tougher Panama Canal drought restrictions will have mixed credit effects for shippingMacroeconomics – US: US GDP revisions confirm economic resilience, but consumer spending momentum dipped in Q3

Private credit lenders built stores of capital that we expect will be put to work competing with banks to fund a new wave of leveraged buyouts. In the first segment of this episode, we discuss LBO competition and the risks it poses. Later, our guest lays out the concentration of private credit among a handful of giant asset managers building their own, largely self-contained lending ecosystems.Guests: Christina Padgett, Associate Managing Director and Sandra Veseli, Managing Director, both from Moody’s Investors Service’s Corporate Finance Group; and Rory Callagy, Associate Managing Director, with Moody’s Financial Institutions Group.Host: Jeff Pruzan, Vice President – Senior Research Writer, Moody’s Investors Service.To read more on this topic, visit Moodys.com. (Some content available only to registered users or subscribers.)Links:Private Credit – Global: Syndicated and private lenders will spar as LBOs revive, upping systemic risk

Big technology companies have been on a wild ride over the past few years, with the pandemic-driven boom followed by an inevitable hangover as economic uncertainty loomed. In the first segment of this episode, we examine the outlook for the global diversified information technology sector over the next 12-18 months. Then at 10.02 we discuss how the European Chips Act will help the region’s semiconductor manufacturers in the face of stiff competition from other parts of the world.Guests: Raj Joshi Senior Vice President and Dirk Goedde Vice President-Senior Analyst - Corporate Finance Group, Moody’s Investors Service. Host: Tania Hall Senior Vice President – Corporate Finance Group, Moody’s Investors Service. To read more on this topic, visit The Big Picture page on Moodys.com (some content only available to registered users or subscribers).