Video Series:

Macro asset-classes

“Although U.S. High Grade is currently at its YE21 target and 2018 tights, we should still see tighter spreads and more compression in U.S. High Yield and emerging market (EM) credit markets, which generally remain 5-10% wide of year-end targets and 10-15% wide of their 2019 tights. Demand-side technical remain strong and default risk remains remote.” Stephen Dulake, Global Head of Credit Research

U.S. High Grade: The sharp slowdown in total debt growth and faster Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) growth is contributing to improved leverage and coverage.

U.S. High Yield: Revenue and EBITDA are above pre-pandemic levels on a constant-portfolio basis. Leverage has begun to turn down and this trend will accelerate in coming quarters.

U.S. Loans: Leverage remains elevated, driven by the gaming and transportation sectors. Trends for loan-only issuers are stronger than for issuers with bonds and loans.