A Revolution in Credit Markets

January 7, 2026

AI Summary

5 min read

🎙️ The Voices & The Context

The Format: Structured interview with a host guiding a deep-dive conversation on credit markets evolution.
The Key Players:
- Host: Vishiti Rupatur, Morgan Stanley's chief fixed income strategist, providing context and probing questions.
- Guest: Dan Toscano, Chairman of Markets in Private Equity at Morgan Stanley, a 35+ year veteran of credit markets.
The Vibe: Educational and insightful, with a professional tone blending historical reflection, market analysis, and forward-looking optimism amid caution.

🗝️ Key Themes & Topics

The discussion traces the transformation of credit markets over decades, from junk bonds to private credit, regulatory shifts, and the massive financing needs of the "next industrial revolution" in digital infrastructure.

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What you'll learn

1 (00:00) **🎙️ Introduction: Dan Toscano**
2 (00:32) **Dan's Career Journey in Credit Markets**
3 (01:21) **Evolution of Credit Markets and Private Equity**
4 (02:52) **Impact of Post-Financial Crisis Leverage Lending Guidelines**
5 (04:06) **Relaxation of Leverage Lending Guidelines**
6 (05:50) **Shift in Private Credit Focus to 2.0**
7 (07:25) **Risks and Concerns for 2026 Financing**

+ Full timestamped outline available in the app

Show Notes

Our Chief Fixed Income Strategist Vishy Tirupattur is joined by Dan Toscano, the firm’s Chairman of Markets in Private Equity, unpack how credit markets are changing—and what the AI buildup means for the road ahead.

Read more insights from Morgan Stanley.

----- Transcript -----

Vishy Tirupattur: Welcome to Thoughts on the Market. I am Vishy Tirupattur, Morgan Stanley's Chief Fixed Income Strategist.

Today is a special edition of our podcast. We are joined by Dan Toscano, Chairman of Markets in Private Equity at Morgan Stanley, and a seasoned practitioner of credit markets over many, many credit cycles.

We will get his thoughts on the ongoing evolution and revolution in credit markets

It's Wednesday, January 7th at 10am in New York.

Dan, welcome.

Dan Toscano: Glad to be here.

Vishy Tirupattur: So, to get our – the listeners familiar with your journey, can you talk a little bit about your experience in the credit markets, and how you got to where we are today?

Dan Toscano: Yeah, sure. So, I've been doing this a long time. You used the nice word seasoned. My kids would refer to it as old. But I started in this journey in 1988. And to make a long story short, my first job on Wall Street was buying junk bonds in the infancy of the junk bond market, when most of what we were financing were LBOs. So, if you're familiar with Barbarians at the Gate, one of the first bonds we bought were RJR Nabisco reset notes. And I've been doing this ever since, so over almost four decades now.

Vishy Tirupattur: So, the junk bond market evolved into high yield market, syndicated loan market, CLO market, financial crisis. So, talk to us about your experiences during this transition.

Dan Toscano: Yeah. I mean, one of the things these markets do is they finance evolution in industries. So, when I think back to the early days of financing leveraged buyouts, they were called bootstrap deals. The first deal I did as an intermediary on Wall Street as opposed to as an investor, was a buyout with Bain Capital in 1993. At the time, Bain Capital had a $600 million AUM private equity platform. Think about that in the scale of what Bain Capital does in private equity today. You know, back then it was corporate carve outs, and trying to make the global economy more efficient. And you remember the rise of the conglomerate. And so, one of the early things we financed a lot of was the de-conglomeration of big corporates. So, they would spin off assets that were not central to the business or the strengths that they had as an organization.

So, that was the early days of private equity. There was obviously the telecom build out in the l