Fitch Sees More Leveraged Loan Than Junk-Bond Defaults in 2022

U.S. leveraged loan default rates are likely to remain higher than high-yield bond default rates in 2022, according to Fitch Ratings.

• Loan default rates are expected to reach 1.5% in 2022, compared to 1% for high-yield default rates, Fitch says
  • Current default rates are 0.6% for loans and 0.5% for high-yield bonds YTD
• Jessica Reiss, head of U.S. leveraged loan research at Covenant Review LLC, has seen an increase of recurring revenue deals happening as well as covenant-lite club deals
• Leisure/entertainment to experience highest institutional-loan default rate in 2022 at 10%, followed by energy and healthcare at 3% ...