As we enter the late part of the #credit cycle, balance sheets start to deteriorate, credit #spreads start to widen and default rates start to rise. According to the chart below, #defaults for the #highyield bonds could peak at 10% in the US and around 6% in Europe. S&P believes defaults could reach 6% in the US in a pessimistic scenario. Today, default rates for US high yield are currently below 2%.
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Source: Deutsche Bank.
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