Seeking Alpha

Junk-bond default rate slides to 1.6%

  • February's 1.6% is off from an already-low 1.9% in January, but Moody's see it rising to 2.3% by year's end. The historical average since 1983 is 4.7%. Globally, the default rate fell to 2.4% in February from 2.6% previously, and Moody's sees a further decline this year to 2.1%.
  • The default rate better stay low - the junk market yields just 5.34% on average and the spread to Treasurys is 379 basis points per the BAML benchmark index, right near a post-crisis low.
  • ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, SJB, HYHG, IHY, HYXU, ANGL, PGHY, HYLS, XOVR, THHY, UJB, QLTC, SHYG, HYZD, HYND
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