Goldman Says Insurer Bond Moves on Private Credit Are ‘Overdone’

The surge in yield premiums on US investment-grade bonds of insurers, triggered by concerns around exposure to private credit, is “overdone,” according to Goldman Sachs Group Inc.’s credit strategists.

In recent weeks, worries around artificial intelligence’s disruptive potential and risks in private credit deals have pushed US high-grade spreads wider, with the latter particularly affecting life insurers’ bonds, strategists including Spencer Rogers wrote on Thursday.

“The market narrative centers on life insurers as a conduit for private credit risk and on the growing web of ownership and distribution ties between insurers and alternative asset managers,” the strategists said. ...