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Moody’s Talks – Behind the Bonds

Season 2 Episode 6
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June 18, 2024

Rapid growth of weight-loss drugs will influence multiple sectors in coming years

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.
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Season 2 Episode 5
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May 21, 2024

Global commodities under pressure as China’s growth engine slows 

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.
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Season 2 Episode 4
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April 16, 2024

Global real estate prospects remain rocky

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Season 2 Episode 3
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March 19, 2024

Pace of electric vehicle sales hits several roadblocks

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.
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Season 2 Episode 2
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February 20, 2024

Artificial intelligence has potential to transform many types of companies

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.
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Season 2 Episode 1
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January 16, 2024

Regional Credit Outlooks for 2024

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.
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Season 1 Episode 29
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December 12, 2023

Refinancing needs will intensify over the next three years, spurring issuance and defaults

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.
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Season 1 Episode 28
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November 21, 2023

Retailers look past inflation fatigue and high inventories, while conditions worsen for seaborne shipping

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.
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Season 1 Episode 27
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October 17, 2023

Private lenders pile up cash, compete for LBOs, driving up risk

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.
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Season 1 Episode 26
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September 20, 2023

Global information technology outlook remains stable; EU Chips Act will help semiconductor sector

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.
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Season 1 Episode 25
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August 15, 2023

Blue skies ahead for airports and airlines as tourists take off

Airlines and airports are benefitting from booming demand from leisure travellers as people take to the skies for a well-deserved summer holiday. In the first segment of this episode, we look at what’s driving strong passenger traffic volumes at US and European airports and what operational challenges lie ahead. And then we explore the tailwinds keeping our outlook for the global airline industry positive for the next 12-18 months.
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Season 1 Episode 24
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July 27, 2023

China’s soft economic recovery raises contingent liability risks from LGFVs

Moody’s analysts discuss the economic and credit outlook for China, including the role of local government financing vehicles (LGFVs) and their debt burdens, and the latest on the property sector.
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Season 1 Episode 23
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July 18, 2023

Tech companies grapple with impact of US-China tensions; global IT services firms face revenue slowdown

We explore the impact that geopolitical tensions between the US and China are increasingly having on technology companies, particularly the vital semiconductor supply chain. Which companies are most affected and what are the implications for China’s domestic semiconductor industry? Then at 9.58, we delve into what is supporting revenue growth for global information technology services companies, as growth slows from exceptionally high levels during the pandemic.
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Season 1 Episode 22
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June 20, 2023

What’s the outlook? And why global real estate has gone negative

Our industry sector outlooks provide insight into the fundamental business and credit conditions that companies face. But what’s the picture across the 18 sector outlooks right now as macroeconomic conditions shift – which sectors are on the up and which face problems? At 10:35 we take a deep dive into an industry that is hitting the headlines: global real estate, where the sector outlook recently went negative. Financial conditions are tightening, the cost of capital is rising and property values are declining.
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Season 1 Episode 21
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May 17, 2023

China property outlook turns stable from negative; insurers and mortgage lenders face limited credit risk from the property sector

In this episode, we discuss China’s stabilizing property sales and improving funding conditions. Then at 9:00, we look at Chinese insurers’ and banks’ exposure to the country’s property sector.
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Season 1 Episode 20
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May 16, 2023

Europe, China lead shift to battery electric vehicles; strong demand boosts battery makers' revenue

In this episode, we dissect the drivers of global light vehicle sales, automakers’ profit margins and the sector’s rapid electrification shift. Volume improvement will be most pronounced in Western Europe this year after the biggest drop-off on the war in Ukraine and associated supply chain difficulties. Sales in China will also be solid, with the unwinding of pandemic-related restrictions providing a boost to the economy and consumers. Then at 6:45, we look into the growth prospects of electric vehicle battery makers that are powering the EV shift, as well as the risks they face from rapid expansion.
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Season 1 Episode 19
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April 18, 2023

Hospitality remains bright spot despite high inflation; cinemas continue to struggle

In this episode, we look at how companies that provide leisure and hospitality services like lodging, casinos, restaurants and cruises are faring. Our research shows that despite growing economic pressures and high inflation many consumers are still eager to splash the cash on entertainment and experiences. But which sectors and regions are likely to benefit the most from this post-pandemic buzz and how long will the party last? Then, at 8:22 minutes, we delve into the world of cinema where many operators are grappling with the credit effects of debt-funded investments made before the pandemic, subsequent shifts in the entertainment landscape and rising costs.  
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Season 1 Episode 18
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April 12, 2023

Global electric vehicle surge is a bumpy ride for insurance, auto finance, state highway bonds

Moody’s analysts discuss accelerating electric vehicle sales’ effects on US auto insurers and auto finance captives, and implications for state fuel taxes.
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Season 1 Episode 17
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March 21, 2023

Rising interest rates are hurting real estate companies in Europe more than in Asia-Pacific

In this episode, we examine the effects of rising interest rates on real estate operating companies and real estate investment trusts in two major regions – Europe and Asia-Pacific. In the former, higher rates have driven a deterioration in credit quality across the sector. And we expect commercial property values to decline in the coming months. On the other hand, business conditions are generally better in Asia-Pacific and valuations have held steady. At 11:50, we check in on the state of the market there, where China’s reopening is having positive spillover effects. 
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Season 1 Episode 16
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February 21, 2023

Efforts to force down costs have healthcare sector feeling unusually queasy

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Season 1 Episode 15
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January 17, 2023

Energy shock strains European companies; US faces obstacles to increasing LNG supply and exports

Reduced supplies of natural gas and soaring prices stemming from Russia’s invasion of Ukraine are squeezing companies in Europe, which are also grappling with slowing economic growth, high inflation and rising interest rates. In the first segment of this podcast, we look at the effect of these stresses on European companies’ credit quality and the most vulnerable sectors. Then, at 9:35, we explain why the US will have trouble boosting its ability to export its abundant natural gas to Europe.
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Season 1 Episode 14
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December 1, 2022

2023 outlook is negative for most regions as growth and consumer demand slows

In this episode, we discuss our 2023 outlook for nonfinancial companies across the globe. We start with what's driving fundamental credit conditions in North America, EMEA, China, Latin America and Asia-Pacific excluding China, and how those drivers differ across the regions. Then, at 10:56 minutes, we take a deep dive into the consumer products sector and factors affecting demand next year for everything from toilet paper to tobacco, beauty to beverages.
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Season 1 Episode 13
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November 22, 2022

Interest rates and supply chain problems continue to drive credit risks

In this episode, we look into the two big drivers of credit quality for companies right now: interest rates and supply chains. Around the world, central banks have been raising interest rates in a bid to cool inflation. But higher interest rates can have a big effect on companies. Our study on US companies showed that rising rates will hit lower-rated companies particularly hard. Then, at 9:04 minutes, we examine the reasons for supply chain problems that have persisted since the covid pandemic’s peak. A combination of factors is making supply chain planning even more difficult right now. Inventory management, labor shortages and extreme weather events have become critical issues.
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Season 1 Episode 12
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October 26, 2022

Liquidity tightens for leveraged finance market, raising corporate default risk

The leveraged finance market – leveraged loans and high-yield bonds – has expanded considerably in recent years and now represents around $4 trillion in outstanding debt worldwide. In the first segment of this podcast, we look at how the tide of liquidity that helped the market grow so much is turning now and what tighter, pricier credit means for speculative-grade companies. Then, at 8:45 minutes, we examine the role of private equity firms in this market and the risks for companies they own.
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Season 1 Episode 11
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September 20, 2022

Risks are rising for real estate globally; China’s property sector continues to struggle

The coronavirus pandemic has changed the way many of us work and live, and that has a huge effect on the real estate sector. In the first segment of this podcast, we discuss the global outlook for the real estate sector, the rising risks and the differences among regions. Then, at 9:07 minutes, we focus on the weaknesses in China’s property sector.
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Season 1 Episode 10
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August 16, 2022

Oil and gas companies reap credit benefit of high energy prices; Europe faces gas crisis

If there’s one sector that affects virtually every other corporate sector you can think of, it’s energy—oil, fuel and natural gas. From food, to travel, to tech, costs and selling prices all depend in part on energy costs. And those energy costs have been through the roof in 2022, especially after Russia invaded Ukraine in February. High energy prices are good news for credit quality in the oil and gas industry. But, as we discuss in our second segment starting at 08:05, the military conflict in Ukraine has also laid bare how much Europe depends on Russia for energy. In recent months, Russia has significantly reduced natural gas deliveries to Europe, leading already-high prices to soar and hindering Europe’s economic recovery from the coronavirus pandemic shock.
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Season 1 Episode 9
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July 19, 2022

Pharmaceuticals earnings growth to slow; the patent cliff could spur M&A

What are the big challenges facing the pharmaceutical giants? Moody’s recently changed the outlook for the pharmaceutical industry to stable from positive because we expect lower earnings growth in the next 12-18 months, excluding COVID-19-related products, than we previously forecast because exposure to generic and biosimilar drugs competition will rise in 2023. In our second segment, starting at 08:50, we look at how a number of big pharma companies face patent expiries for blockbuster drugs in the coming years. What consequences will that have for their credit quality and the prospects for M&A?
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Season 1 Episode 8
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June 21, 2022

Military conflict strains automakers; electrification reshapes global auto market

Russia’s invasion of Ukraine has put further stress on an auto supply chain already taxed by a shortage of key parts such as microchips. These supply disruptions, along with broader macroeconomic issues such as inflation, led us this month to cut our light vehicle sales growth estimates for 2022. Production bottlenecks will be largely resolved next year, but consumer demand may suffer because of inflation. A bright spot for the auto sector is the fast growth of the electrified vehicle market, especially in China and Japan.
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Season 1 Episode 7
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May 17, 2022

Russia-Ukraine conflict brings risks and opportunities

Russia’s invasion of Ukraine has raised questions about how companies’ credit quality will hold up if the conflict escalates. Some companies are set to benefit as commodity prices soar. But others are at risk from commodity price and supply-chain shocks, or financial and economic disruptions. Which companies and regions are most exposed and what do they have in common? And away from the conflict, global telecoms companies are stepping up investment in 5G – the fifth generation of network technology. It’s new, it’s a little puzzling, and it’s expensive for the companies that need to adapt to it—and for now at least it’s not clear how they’ll get a return on their investment.
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Season 1 Episode 6
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April 6, 2022

Ukraine-Russia crisis hits array of companies globally; consumer products outlook moves to stable from positive

Marina Albo of the Corporate Finance team explains that most companies’ direct exposure to Russia is low outside the energy sector, but indirect exposure – through energy and commodity costs and access – is widespread. Then Paolo Leschiutta outlines why operating profit growth is slowing for consumer products companies.
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Season 1 Episode 5
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March 15, 2022

Exposure to cyber risk and ability to address it vary across healthcare, services and commodities sectors

Amid increased cyberattack risk, Marie Fischer-Sabatie and Matt Cahill discuss differences in cyber risk preparedness among hospitals, pharmaceutical companies and medical device manufacturers. Then Farah Zakir does the same for business and consumer service companies, and Jonathan Reid for companies in the chemicals and other basic commodities sectors.
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Season 1 Episode 4
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February 15, 2022

Rising inflation poses a challenge for many companies around the world

Paloma San Valentin of the Corporates team discusses the impact of rising inflation on a wide range of global industries. Then, at 10.10 minutes, Emile El Nems takes a closer look at how higher prices are affecting the US building sector.
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Season 1 Episode 3
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January 20, 2022

Release of pent-up travel demand will benefit airlines and hospitality

Jonathan Root and Pete Trombetta discuss the recovery prospects for the airlines, cruise and lodging sectors globally in 2022 amid Omicron and other disruptions. And Sandra Beltran explains how increased travel will benefit a range of entities in Latin America and the Caribbean this year.
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Season 1 Episode 2
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December 1, 2021

GDP and earnings growth support stable regional corporate credit outlooks; drivers of stable outlooks for US, Europe retail differ

Ed DeForest, Richard Morawetz and Gloria Tsuen of the Corporates team discuss the stable outlooks for nonfinancial companies in the Americas, EMEA and Asia (ex Japan) in 2022, highlighting differences and risks among regions and sectors. And Christina Boni and David Beadle explain why Moody’s recently changed the outlook for both the European and US retail sectors back to stable from positive.
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Season 1 Episode 1
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November 15, 2021

Pandemic has altered landscape for speculative-grade companies and creditor protections

Our new corporate finance podcast series focuses on the market forces shaping credit across industries - from airlines to pipelines and computer chips to potato chips. In the inaugural episode, Annalisa Di Chiara, Richard Etheridge and Christina Padgett discuss the current credit trends in the higher-risk segment of the corporate debt market, highlighting regional differences. And (starting at 13:03 minutes) covenant specialist Evan Friedman explains how changing market conditions contribute to weaker creditor protections.
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EP 0 Title - Moody’s Talks – Behind the Bonds Trailer

On Moody’s Talks - Behind the Bonds, hosts Tania Hall and Jeff Pruzan join analysts from Moody’s corporate finance group worldwide to discuss the market forces shaping credit across industries - from airlines to telecoms and everything in between. These forces include the uneven recovery from the coronavirus pandemic, digital transformation, cyber risk, climate-change imperatives and much more. Please join us as we connect the dots on corporate credit quality.
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