Robert Cohen: Bank Loans Reveal What Private Credit Won’t | Bloomberg TV

DoubleLine’s Robert Cohen, Director of Global Developed Credit, joins Bloomberg’s The Close live from DoubleLine’s L.A. offices to discuss AI financing, credit markets and the growing cracks in private credit. On AI, Mr. Cohen notes that demand for debt issuance remains insatiable as corporate credit supply has actually shrunk since the pandemic, but he warns that without visibility into returns on capital – particularly from issuers that don’t break out AI profitability – it is difficult to assess whether capital is being deployed wisely. He favors the picks and shovels over the gold itself, and Mr. Cohen flags software as the most vulnerable sector if AI deployment disrupts traditional business models. On portfolio construction, he advocates for short-duration, high-income portfolios that sidestep the concentrated AI spending risk embedded in cap-weighted credit indices, pairing selective corporate credit with securitized products and real estate. He closes with a candid assessment of private credit, noting that roughly 90% of the market is rated B3 or lower, and pointing to the syndicated bank loan market – where software loans are trading roughly 10 points below the broader index, and CCC loans are down 8% on the year – as the clearest window into what is actually happening beneath the surface of a market where headline spreads remain deceptively tight.