US Junk Bond Default Rate to Rise to 3.5% in 2023, Fitch Says

The default rate for US junk bond issuers will rise to a range of 2.5% to 3.5% in 2023 as higher interest rates slow the economy into a recession, according to a note from Fitch Ratings on Tuesday.

• The default rate will remain below the 21-year historic average of 3.8% and comprise about $40 billion of volume
• Roughly half of next year’s defaults will be concentrated within the retail, telecommunications and media industries, wrote Fitch analyst Eric Rosenthal
  • Approximately 30 defaults will take place in 2023, Fitch analysts forecast, representing a substantial increase from the 11 defaults recorded in 2021 ...