US corporate debt binge, FT Weekend podcast preview

This is an audio transcript of the FT News Briefing podcast episode: US corporate debt binge, previewing the FT Weekend podcast

Marc Filippino
Good morning from the Financial Times. Today is Friday, September 3rd, and this is your FT News Briefing.

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Banks and investors are preparing for a flood of new corporate debt hitting the market. And Germany’s blue-chip stock index, the Dax, is getting a makeover, thanks in part to the Wirecard debacle.

Joe Miller
This is very much being seen as a new moment for the Dax and a chance to move on from that scandal.

Marc Filippino
Plus, we’ll tell you about the FT’s new weekend podcast. It launches tomorrow and host Lilah Raptopoulos will give us a taste of what’s in store. I’m Marc Filippino, and here’s the news you need to start your day.

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After a quieter August for corporate bond issuance, investors and banks are bracing themselves for a US corporate debt binge. Some bank analysts told the FT they expect to see up to 60 billion dollars in riskier high-yield debt issued. For higher rated debt, that number is expected to be well over 100 billion dollars. Now, it’s not unusual for September to be a busy time for corporate bond sales, but some say this month could come close to matching last year’s frenzy in some parts of the market. That’s when companies borrowed heavily to get through the worst of the pandemic. Now companies are borrowing in part to lock in lower interest rates. It’s also to fund acquisitions and to buy back stocks to reward shareholders.

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Germany’s leading stock index will undergo a shake-up later this month. The Dax blue-chip index will have 40 companies, that’s up from 30. And the new stocks will be announced today. Our Frankfurt correspondent Joe Miller explains why the folks who operate the Dax are expanding in the first place.

Joe Miller
It’s been long in gestation, to be honest, but really, the impetus behind this latest change or this facelift was the collapse of Wirecard last year, which, of course, the other 29 members of the Dax had nothing to do with. But nonetheless, there were questions raised about how Wirecard got on to the Dax in the first place. And there was a sense that the Dax index needs an overhaul. So consultation was launched. Hundreds of companies and financial institutions were asked what they’d like to see changed about the index. And then Deutsche Börse, which runs the Dax, came up with a few modest changes, which include expanding the Dax from 30 to 40 constituents and a little bit tougher profitability criteria for inclusion in the Dax. But this is very much being seen as a new moment for the Dax and a chance to move on from that scandal.

Marc Filippino
So, Joe, any idea which companies will get promoted to the Dax?

Joe Miller
Well, there’s some that seem like dead sets, and they are names that many might be familiar with, like Airbus, which is one of Europe’s largest companies; Siemens Healthineers, which is a spin-off of Siemens, which does kidney dialysis machines and lots of other pharmaceutical equipment; and HelloFresh, which sends you these meal kits — mostly names that are already familiar in Germany but perhaps could do with a little bit more exposure around the world.

Marc Filippino
Joe, was anyone concerned that adding more companies to the Dax would, in a way, cheapen the index, make it less exclusive?

Joe Miller
There was a little bit of that in the consultation. There were some respondents who are worried that you’re diluting the Dax, so to speak, by adding 10 companies would lessen the prestige. But I think after the Wirecard scandal, anything that tightens the criteria, even if it includes more companies, is probably seen as a, as a good thing. And it’s not like the 30 existing members of the Dax have covered themselves in glory. Of course, you have Volkswagen and the Dieselgate saga. You have Deutsche Bank obviously has been going through some very tough times. So it’s not really like this elite club has been stainless until this point. I think the hope is that with the diversification of the index and with some newer and more inventive companies in there, that perhaps it might make the Dax more exclusive once again and will give it more of a sheen.

Marc Filippino
Joe Miller is the FT’s Frankfurt correspondent.

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It’s Friday, almost the weekend. What are you planning to do? Seriously, what are you going to do? Are you closing out summer with one last trip to the beach? Are you headed to see family and friends? Maybe you’re just gonna unfold the lawn chair, plop down and spend a day diving into a book. The reason I ask is because here at the Financial Times we talk about some serious stuff — equities, central banks, bond yields. We can be a little buttoned up. But the FT also has fantastic writing about the arts and culture. Now, we’ll bring that to you with a new podcast. It’s called FT Weekend. It’ll be hosted by Lilah Raptopoulos. You might know her from our former podcast Culture Call. She joins me now to talk more about the new show. Hi, Lilah.

Lilah Raptopoulos
Hi, Marc.

Marc Filippino
So, Lilah, are you excited about the launch of the weekend podcast?

Lilah Raptopoulos
Yeah, you know, it’s been a journey leading up to this, but yes, I’m very excited.

Marc Filippino
So you’ve been a fan of the weekend section for a while now. What makes it so appealing to you?

Lilah Raptopoulos
So when I started at the FT, I was living in London and I realised so many people I had met in London, they bought FT Weekend, like FT Weekend was a little gift they gave themselves every Saturday and it sort of transported them. And it started to do that to me. Like not only did it explore food and fashion and film and travel and all that stuff, but it also dug into the why. And it had all these long-form pieces that gave human faces to the news, and, and I felt, like, made that money and power more meaningful. And then also working at the FT, I used to sneak upstairs where they were putting together FT Weekend. They had their own floor. And it was just really fun up there, like it was very colourful and full of characters.

Marc Filippino
OK, let me jump in here because I want to play a clip from a trailer you produced for the FT Weekend podcast. And in that clip, we’ll hear from the people who make FT Weekend, the people up there on that floor that you described.

Matt Vella, Jan Dalley and Edwin Heathcote
I’m Matt Vella, editor of the FT Weekend magazine, and I’m interested in finding human stories amid the news. I’m Jan Dalley. I’m the arts editor at the FT, and I look after the whole range of art forms. I’m Edwin Heathcote. I’m the architecture and design critic. I’m Enuma Okoro . . . [fades].

Marc Filippino
So Lilah, now, you get to talk to these people for the podcast. And you also interview people outside the FT, people who are shaping arts and culture. I’m really excited about your episode with the chef Daniel Humm. Can you talk a little bit more about that?

Lilah Raptopoulos
Sure, so the food world, I think, is an interesting microcosm because we all eat and we order food and we have to make choices around that all the time. They’re becoming increasingly moral choices. And restaurants were hit really hard this pandemic. And some of them came at the other side making big changes or announcing big changes. The most prominent of those was Daniel Humm. For people who don’t know, he’s the kind of very revered chef of Eleven Madison Park, it’s this three-Michelin-star restaurant here. He made this very buzzy move to go entirely plant-based in June. So no meat. And he did it for the environment, but it was a huge hit. And now his wait-list is 50,000-people long. And yeah, so I went to his kitchen. He showed me around. We talked about what it means to do good as a chef. And and then I spoke with the matriarch of doing good in the restaurant world, Alice Waters, who is the founder of Chez Panisse in Berkeley, California. She basically founded the farm-to-table movement. And she wants her legacy now to be finding ways to get schools across America to teach students about food earlier and get all students in America to have a healthy, sustainable school lunch, which many people have tried and failed to do. But I would not put much past Alice Waters.

Marc Filippino
So I’ve had the privilege of hearing some of the episodes in advance, do a little taste-testing. And one thing that strikes me is the variety of voices and topics in the show. Why was that so important to you?

Lilah Raptopoulos
Probably because we have so many fun people and smart people. There are so many things I want to know more about or things I don’t know enough or anything about that these people have entire careers based on and know everything about. So the more of these people and their ideas that we can sort of pack into these episodes, I think the better.

Marc Filippino
Lilah Raptopoulos is the host of the FT Weekend podcast. The first episode comes out tomorrow, Saturday, September 4th. Looking forward to the launch, Lilah. Thank you.

Lilah Raptopoulos
Thanks, Marc. It’s always a pleasure.

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Marc Filippino
Before we go, a word from the UK where, to the delight of economists and business owners, consumers’ wallets may be getting a little lighter. In August, foot traffic in shops rose to the highest level since the start of the pandemic. Industry data show that the total number of people visiting stores was up by 10 percentage points from July. That’s thanks to the staycations and people returning to the office and back-to-school shopping. But August foot traffic was still down nearly 20 per cent from the same month in 2019. So UK shops are still a long way off from getting back to pre-Covid normal.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back next week for the latest business news.

The FT News Briefing is produced by Fiona Symon and me, Marc Filippino. Our editor is Jess Smith. We had help this week from Jenn Ablan, Gavin Kallmann and Michael Bruning. Our theme song is by Metaphor Music. And we want to bid farewell to our fantastic intern, Zoe Han. Thank you for all your hard work this summer, Zoe. And we can’t wait to see what you do next. Best of luck.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.