Another Industry Default Wave Akin To Energy Unlikely: UBS

Though another industry default wave as significant as energy is not anticipated, UBS analysts believe industry concentrations in primary U.S. credit markets are elevated, not only in energy but also in the media, telecom, retail and healthcare sectors. Matthew Mish and Stephen Caprio note in their June 30 research piece titled “US corporate default wave: will other sectors wipe out?” that extreme changes in the composition of corporate credit markets can be indicative of abnormal debt growth. Commodity sector defaults will remain at elevated levels The UBS analysts reference their recent article outlining their base case outlook for U.S. corporate defaults and conclude that commodity sector…