Chart No. 205
Credit
7 min read
Members
Defaults are rising in the one place nobody looks.
Bond defaults are calm. Leveraged loan defaults, counted properly with distressed exchanges, are at 4.1% and climbing.
Nadia Brennan
Founder and editor
Illustrative data based on public sources.
Leveraged loans · CLOs
Bond default rates in US high yield are close to their long-run average. Default rates in leveraged loans, counted properly, are at 4.1% and rising.
Headline loan default rates leave out distressed exchanges: deals where lenders accept less than they are owed to avoid a bankruptcy. Add them back and the loan market has been in a mild default cycle for eighteen months.
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Not investment advice. Carry writes about markets; it does not tell you what to buy or sell. Charts use illustrative data unless a source says otherwise.
