Junk bond default rate to triple within 12 months, S&P says


Companies holding low-rated debt are in for a brutal stretch as the economy heads into a coronavirus-induced recession, according to a forecast Friday.

S&P Global Ratings said the default rate for high-yield, or junk, bonds is heading to 10% over the next 12 months, more than triple the rate of 3.1% that closed out 2019. 

“The current recession in the U.S. this year is coming at a time when the speculative-grade market is historically vulnerable to a liquidity freeze or an earnings drop,” Nick Kraemer head of S&P Global Ratings Performance Analytics, said in a statement.

The dour outlook comes against a sudden stop in U.S. economic activity brought about by preventive measures against the…


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