The new credit cycle

Bond defaults are on the rise in the US. The new credit cycle is the direct result of the rising interest rates. We believe the situation will worsen over the coming months even if the Fed will pause hiking rates. In fact, as the economy will start to slow down, corporate debt will eventually need to be refinanced at higher rates, putting more strain on the cash flows of the weakest corporates. We remain very selective in  what and how much credit risk we take for our clients.