Fitch U.S. high-yield default rate expected to drop to 3.2% in April

By Caroline Salls

Pittsburgh, April 18 – Fitch Ratings’ trailing-12-month U.S. high-yield default rate is expected to drop to 3.2% by the end of April after closing March at 3.9%, according to a report released Tuesday.

The agency forecasts the default rate to finish 2017 around 3%.

“The default rate should decline for the fourth straight month as many casualties from energy and metals/mining in 2016 roll out of the universe,” Fitch’s Eric Rosenthal said in the release.

Fitch said it expects to see defaults from Nuverra Environmental Solutions, Inc. and rue21, Inc. by the end of April, in addition to the four tallied already. If Nuverra and rue21 default, the April volume would be $2 billion, significantly less than the $12 billion moving out of the default universe, the agency said.

According to the report, Fitch believes retail will contribute steadily but incrementally to the default rate this year, with the sector rate reaching 9% by year-end.

© 2015 Prospect News.
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