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US Leveraged Loan Default Rate to Hit 1.5% by End 2022: Fitch

May 20, 2022, 4:02 PM

The US institutional leveraged loan default rate stands at just 0.50% year-to-date despite the slight pickup over the past six weeks, but it’s expected to increase as higher interest rates, inflation and weaker growth take their toll, Fitch Ratings said in a report Friday.

  • Fitch currently forecasts the default rate to end 2022 at 1.5%
  • Default volume tallied $2.8 billion in April driven by Envision Healthcare’s distressed debt exchange, while Talen Energy Supply’s May 9 bankruptcy contributed $760 million
  • There are a couple of issuers expected to default soon, potentially within the next month. Automotive company Service King already defaulted ...