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Fitch: U.S. Leveraged Loan Default Rate Bottoms as Market Awaits Expected Defaults

Posted by Fitch Ratings on Aug 18, 2017 11:32:30 AM

The TTM U.S. institutional leveraged loan default rate is at 1.7%, down from 1.9% at end-July, marking what Fitch Ratings believes is a trough in the default rate. Fitch expects the default rate will end the year around 2.5%.

"Loan defaults are at a temporary stand-still right now, but a handful of bankruptcies/restructurings are expected shortly," said Eric Rosenthal, Senior Director of Leveraged Finance. "The energy and retail sectors still have a big presence, contributing nearly 60% to the trailing 12-month default volume." The sector default rates for energy and retail stood at 17.4% and 5.4%, respectively, at the end of July.

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Topics: Loans


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