2013 U.S. High Yield Default Outlook

Fitchratings.com
2013 U.S. High Yield Default Outlook

Fitch Ratings projects that the U.S. high yield default rate will remain low in 2013. However, the rate needs to be viewed with caution as more of a lagging rather than leading indicator of credit conditions.

The positive rating drift of 2010 and 2011 reversed direction over the course of 2012. Corporate profit growth stalled and debt moved higher. In addition, demand for yield product has begun to have a more meaningful impact on transaction risk with paid in kind bonds, covenant-lite loans, and surging ‘CCC’ issuance - all examples of more aggressive issuance activity going into 2013.

http://www.fitchratings.com/