- U.S. junk bond defaults rose to the highest level since October 2009 thanks to depressed prices for energy and metals. There were nine defaults in May, with the energy and mining industries accounting for all of them. For all Q2, those two industries have accounted for 93% of defaults.
- The junk bond default rate of 2.3% in May was 20 basis points higher than April.
- "Outside of energy, metals and mining, the fundamentals are strong, but the energy component of high yields has grown so fast, and lower commodity prices have really taken their toll,” says Fitch's Eric Rosenthal.
- According to Lipper, investors pulled $2.56B from U.S. junk-bond funds in the past week, the largest weekly outflow this year. For their part, high-yield borrowers raised just $1.83B this week, the slowest pace this year.
- Source: Bloomberg
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