JPMorgan Shows Why US Default Rate Is Less a Worry for Investors

JPMorgan Chase & Co.’s Nelson Jantzen has a calming notion for investors alarmed by the US corporate default rate rising to almost 6% by one calculation.

About half the volume of corporate debt included in the default rate in one measurement isn’t wholly a problem for investors, at least not now. In another analysis, the speculative-grade default rate is actually closer to about 3% at the end of March, according to Jantzen, a head of US high yield and leveraged loan strategy.

The difference stems from what happens when a company tries to avoid bankruptcy by entering a distressed debt ...