Credit Benchmark, the provider of global consensus ratings and analytics, today said that it predicts that default risks will continue to rise and peak by mid-2024 across US industries, as explained in its inaugural 2024 Default Risk Outlook. However, credit quality should recover in H2 2024, assuming a more accommodative monetary policy and barring any further escalation of geopolitical risks.

Credit Benchmark’s new report covers 13 US industries, representing more than 13,000 companies and legal entities, 70% of which are not rated by a major credit rating agency. This significant coverage and diversified dataset allows Credit Benchmark to make unique and credible sector-specific default risk projections for 2024. All of Credit Benchmark’s data and projections are based on borrower probability-of-default estimates, which are aggregated from over 40 global banks, nearly half of which are G-SIBs (global systemically important banks), and anonymized.

“If inflation continues to slow in 2024 and the Fed cuts rates as many expect, funding conditions will ease somewhat and most likely drive a recovery across the majority of US industries in the second half of the year,” says Michael Crumpler, CEO of Credit Benchmark. “However, there are many geopolitical risks – especially potential disruptions to supply chains – that could pose downsides to this outlook.”

“In addition, the outcome of the US election later this year may affect industry-specific drivers,” says Mr Crumpler.

“Our default rate projections also reveal important industry outliers,” explains Mr Crumpler. “The weakest performer is the US telecoms sector, which is set to record a rise in its default rate to 4.4% this year on the back of uncertainty over network battles and M&A. Moreover, default risk among US leveraged loans will also continue to rise in H1 but should peak below 5%. The best performer is the US oil & gas sector, which should continue its recent improvement with a further drop in its default rate to 0.7%.”

Note to Editors:

About Credit Benchmark

Credit Benchmark provides Credit Consensus Ratings and Analytics that are derived from data and internal credit risk ratings contributed by more than 40 leading global financial institutions, almost half of which are Global Systemically Important Banks (GSIBs).

The contributions are aggregated, anonymized, and published twice monthly in the form of unique Credit Consensus Ratings and Credit Indices. This means that Credit Benchmark is making the views of far more analysts publicly available than ever before.

Covering over 100,000 entities, 90% of which are unrated by any other publicly available traditional ratings methods, Credit Benchmark’s credit risk data covers around 170 countries and close to 200 industries and sub-sectors worldwide.

Credit Benchmark’s insights are trusted by a host of the largest financial institutions in the world, either to benchmark their own internal credit risk analysis against those of a global peer group, or simply to gain accurate credit risk views where none were previously available.

Credit Benchmark was founded in 2015 and is headquartered in London, with offices in New York and Bangalore.

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Credit Benchmark, the provider of global consensus ratings and analytics, today said that it predicts that default risks will continue to rise and peak by mid-2024 across US industries, as explained in its inaugural 2024 Default Risk Outlook.