Company Defaults to Rise

Survey shows debt investors expect corporate defaults to rise as Fed tapering winds down and interest rates rise globally.

Debt investors expect corporate defaults to increase during the next year as the Federal Reserve winds down stimulus measures and pushes interest rates higher, according an International Association of Credit Portfolio Managers (IACPM) survey.

The credit default outlook index, in which negative numbers indicate an expectation of higher defaults and deteriorating credit conditions, fell to -14.6 at the end of March from 4.5 in December, the group said in a statement today. IACPM’s 93 members include banks, insurance companies, and asset managers in 17 countries.

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