Fitch Ratings reports that US corporate default rates for leveraged loans and high-yield bonds remained stable in July 2026, at roughly 3.8% and 2.7% respectively on a trailing 12-month basis. The rating agency expects defaults to rise before year-end, forecasting leveraged loan defaults to reach 4.5% to 5.0% and high-yield defaults between 2.5% and 3.0%. Private credit is the main source of concern, with a record 6.1% trailing 12-month default rate and 17 unique defaulters recorded in July alone. The divergence between institutional borrowers with a potential 2.3% default rate and smaller issuers facing 6.1% underscores a bifurcated market. Fitch attributes the current steadiness more to base effects from prior-year defaults rolling off than to genuine credit quality improvement.
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