Disconnect Between Credit Professionals and Financial Markets

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IACPM Credit Outlook Survey Forecasts Rising Defaults and Wider Spreads, Spotlighting Disconnect Between Credit Professionals and Financial Markets

New York, NY – Responding to inquires for the second quarter IACPM Credit Outlook Survey, association members, who are credit professionals responsible for managing corporate loan portfolios, forecast wider credit spreads over the next three months and rising loan defaults over the next 12 months. The latest reading for the IACPM’s major market credit spread index is negative -56.9, while the result for the association’s aggregate credit default outlook index is minus -83.5.

The forecasts are a stark contrast to results in global financial markets which, after a steep drop at the onset of the coronavirus pandemic, have largely recovered. Most global equity markets are at or near where they started the year, while major market credit spreads tightened considerably over the last quarter.