Credit default risk in the US is set to peak by mid-2024 before beginning to decline in most sectors, with leveraged loans showing the highest projected default rate compared to 12 other US sectors, writes William Bennett-Lynch and Grant Murgatroyd for Preqin, citing Credit Benchmark’s 2024 Default Risk Outlook.
“The default risk outlook for US industries is largely tied to inflation expectations, with anticipated US Federal Reserve (Fed) rate cuts factored into the Credit Benchmark analysis. External geopolitical risks and economic malaise could still pose significant challenges to creditworthiness…Leveraged loans have the highest projected default rates of the 13 sectors analyzed in the report, and the sector is not expected to reach its turning point until the end of 2024 or 2025.”
Preqin, January 24, 2024.
