Economic Stimulus Important But Vaccine Paramount – IACPM News Release
15 October 2020
Respondents to Latest Credit Outlook Survey Continue to Forecast Higher Defaults and Wider Spreads but Say ‘Worst Case’ May Not Happen
New York, NY – A large majority of credit portfolio managers responding to the latest IACPM Credit Outlook Survey believe credit defaults will rise in coming months, while a somewhat smaller majority think credit spreads will widen. Seventy three percent of respondents forecast higher corporate defaults globally, with 26% predicting defaults will remain unchanged. At the same time, 55% say credit spreads will widen on North American investment grade debt, while 60% believe spreads will widen on European investment grade debt. Seventy percent say spreads will also widen on North American high yield debt and 77% believe spreads will widen on high yield debt in Europe.
Perhaps surprisingly, a number of respondents say, while the forecast remains negative, credit conditions seems to be stabilizing and the outlook is at least clearer.