12:28 - 1.06.2023

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June 1, Fineko/abc.az. Deutsche Bank analysts say that the current market situation may lead to a wave of corporate defaults.

ABC.AZ reports that the default rate on high-yield US bonds in April rose to 2.1% from 1.1%, and the default rates on loans in the US rose to 3.1% from 1.4%.

In Europe, speculative default rates rose from 1.7% to 2.7%. According to Fitch, the average default rate on high-yield bonds in the U.S. is 3.6%, Deutsche Bank analysts Jim Reed and Steve Caprio noted.

According to them, by Q4 of 2024, the default rate on high-yield bonds in the U.S. will reach a peak of 9%, and the default rate on loans in the U.S. will reach 11.3%. The European speculative default rate will also rise, albeit to a lower 5.8%.

“In our opinion, high-yield bonds continue to trade too expensive compared with the economic background, and we continue to recommend selling at every opportunity and improving the quality where possible,” Deutsche Bank analysts said.