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Hidden in Plain Sight | The AI debt you don't see
In the latest edition of Klay Insights, Akshat Kumar, Group Head – Fixed Income, explores why credit investors need to look beyond ratings and reported leverage to understand the full economic exposure and assess risk more effectively.
Read the latest Klay Insights to discover why cash flows, financing structures and underlying obligations matter more than ever in today's evolving AI landscape.
Compute now, pay later: The AI debt boom and why credit spreads matter
While AI is typically viewed as an equity story, we examine it through a fixed income lens, highlighting how the unprecedented investment in AI infrastructure is driving one of the largest corporate financing cycles in recent history. The note explores how the resulting wave of debt issuance could reshape global credit markets, why supply dynamics may increasingly influence credit spreads alongside credit fundamentals, and what this means for issuer selection and investment opportunities in fixed income portfolios.
When Headline EPS stops reflecting underlying earnings.
One of the defining features of this earnings season is the widening disconnect between headline EPS growth and underlying operating earnings. With around 50% of the S&P 500 having reported, Bloomberg data shows headline EPS growth running at roughly 28% year-on-year, while consensus expects this to increase to 37% by the end of the reporting season.
Global Fixed Income Views
In the latest edition of Klay Insights: Market Commentary, Akshat Kumar, Group Head of Fixed Income, shares his perspective on the evolving global fixed income landscape.
Time & Timing: A practical understanding of duration returns in Fixed Income
Duration is one of the most widely discussed concepts in fixed income investing, but its practical implications are often misunderstood.
