Default Rate Poised To Climb

The high-yield default rate is expected to accelerate around the beginning of the second quarter this year after bottoming out.

  • 07 Jan 2005
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The high-yield default rate is expected to accelerate around the beginning of the second quarter this year after bottoming out. The global speculative-grade default rate fell to 2.2% at the end of December, is expected to drop to 1.8% near the start of the second quarter and bounce back to 2.7% by year-end, according to Moody's Investors Service. "The traditional nine-month lag between [Federal Reserve] action and the bite on credit risk premium is on track for default rates and credit risk to bottom out somewhere around the second quarter," explained Christopher Garman, head of high-yield strategy at Merrill Lynch in New York.

While companies in most sectors are fairly well-funded and it is unlikely default and credit risk will skyrocket, sectors reliant on consumer spending are likely to feel the economic slowdown, added Garman. "The corporate sector looks healthy but the consumer is overstretched," he noted, declining to be more specific about which areas will be hit hardest. Garman noted there are indications a flight-to-quality might be underway as higher-quality sectors appear more attractive on a risk-reward basis.

  • 07 Jan 2005

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 3,319 10 12.84
2 Citi 2,562 6 9.92
3 Goldman Sachs 2,150 3 8.32
4 Credit Suisse 1,822 6 7.05
5 Societe Generale 1,814 4 7.02

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 22 May 2017
1 Citi 41,255.30 117 12.99%
2 Bank of America Merrill Lynch 37,631.92 109 11.85%
3 Wells Fargo Securities 32,082.26 89 10.11%
4 JPMorgan 20,969.41 64 6.60%
5 Credit Suisse 16,754.47 44 5.28%