150. The firms paying off their pandemic debt

Lesley Dunn, co-manager of Baillie Gifford Strategic Bond fund, talks to us about how company balance sheets are recovering after the pandemic. She discusses the amount of money firms had to borrow to keep themselves afloat in lockdown, the price they had to pay to do so, and how some are now looking to reduce their debt. Lesley also gives her view on inflation and discusses the investment case for Netflix’s bond – despite the company “burning cash” in its bid to create original content.
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Baillie Gifford Strategic Bond gives investors access to a concentrated portfolio (typically 60-80 stocks) of primarily UK fixed income securities, from both the investment grade and high yield segments of the market. Unlike many of their peers in the strategic bond sector, the managers aim to add value almost exclusively through their stock-picking prowess and do not aggressively manage interest rate exposure.

Read more about Baillie Gifford Strategic Bond

What’s covered in this podcast:

  • Are companies really recovering quickly from the pandemic? [0:31]
  • How many companies issued bonds during lockdown and at what cost [2:49]
  • The example of Booking.com having to borrow money to see it through 2020 [3:44]
  • If companies can pay back debt early if they want to [5:29]
  • Whether the manager is finding more opportunities in investment grade or high yield bonds [6:35]
  • The manager’s view on inflation [9:14]
  • Why the manager likes Netflix’s bond [12:02]
  • Which other bonds are held in the portfolio [13:53]
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