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American Century corporate credit head weighs yen carry trade risk

American Century Investments Head of Corporate Credit Jason Greenblath said the long end of the rate curve has moved higher, with investors also tracking large AA “drive-by” bond supply.

Reported · Written up by our desk · Fund Industry

ETF Trends reports that American Century Investments Head of Corporate Credit Jason Greenblath discussed how the ongoing yen carry trade situation could affect investors, including those focused on fixed income holdings. In a conversation, Greenblath also pointed to a shifting yield curve as part of the backdrop for corporate bond positioning.

Greenblath said the long end of the rates curve, specifically the 10-year, 20-year, and 30-year segments, has risen more than the front end, which he described as more stable. He linked the move in longer maturities to inflation expectations around the Fed and questions about whether the central bank can fully control rate outcomes.

He also flagged a supply dynamic in corporate credit, citing about $25 billion in recurring “drive-by issuances” coming from AA issuers. Greenblath suggested there are only so many buyers in the long end before investors demand concessions, and he said hyperscaler-related mispricing may persist for “one to two years” rather than quickly reversing.

Beyond headline rate moves, Greenblath argued that risk is not uniformly mispriced across corporate market categories, but instead appears in particular debt structures. He cited capital structure opportunities, including perpetual bonds, and described the focus as extending beyond banks in Europe and the U.S. to investment grade borrowers in the hybrid portion of their capital structure, including sectors such as pipelines and energy and utilities.

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