Throughout 2015 and 2016, despite the accommodative monetary policies from central banks around the world, the global speculative-grade default rate rose to 4.2%–its highest level since 2009 according to rating agency Standard & Poors.
Defaults spiked thanks to the rising level insolvencies in the oil & gas sector, as companies continue to feel the pain from the 2014 oil price downturn.
At 4.2% defaults were running just above the 36-year annual average of 4.1%. However, excluding energy, at the end of 2016, the global speculative-grade default rate excluding energy and natural resources was a much more modest 2.3%. The speculative-grade default rate for the energy and natural resources sector was 21.1% by year-end, up from 9.8% in 2015.
“Despite...
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