Jeffrey Sherman: Bessent Testing the Plumbing | Bloomberg TV

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DoubleLine Deputy CIO Jeffrey Sherman joins Bloomberg’s The Close to discuss why the firm’s not backing away from the front end of the U.S. Treasury yield curve despite a rough year for bonds. With the curve remaining stubbornly flat, Mr. Sherman says a spread of 25 basis points to 30 basis points just isn’t enough to justify DoubleLine reaching into intermediate maturities. In addition, he’s skeptical of Treasury Secretary Scott Bessent’s recent efforts to tamp down long-term yields. “If he’s really serious about getting the back end of the curve under control, he needs to bring out the bazooka,” Mr. Sherman says, calling the buyback more about testing the plumbing than solving the problem.

On corporate credit, he flags a growing wave of AI hyperscaler debt issuance tied to capital expenditure, with Wall Street estimates for next year’s buildout ranging from $900 billion to $1.4 trillion. He sees value in shorter-dated paper from companies like Alphabet and Meta that have other profitable pursuits supporting the debt, but he draws a line against names that are nominally investment grade. Pointing to companies like SpaceX, Oracle and the Paramount leveraged buyout, he notes, “They’re really borrowing like they’re investment grade companies, but the profile is probably a below-investment-grade name given those debt loads.” DoubleLine’s approach is selective rather than wholesale, avoiding what Mr. Sherman calls an asset liability mismatch between fragile data-center economics and the bonds financing them.

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DoubleLine Capital LP

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DoubleLine has been managing money for insurers since its inception in 2009. The firm's focus on securitized fixed income and risk management positions it well to manage money for insurers. The firm offers an array of fixed income strategies including dedicated ABS, private ABF, CLOs, infrastructure debt, non-QM, commercial and residential loans, multi-sector fixed income and EM. We understand that the needs of each insurer can vary, and our insurance team is focused on providing our clients with unparalleled access to the investment team and creating custom solutions to meet their distinctive objectives. DoubleLine wants to be your fixed income partner.
 

Paul Schroeder, CFA   
Relationship Manager- Insurance  
paul.schroeder@doubleline.com
Direct: 213-372-3123
Main: 813-791-7333
 

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