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Junk-Bond Default Rate May Nearly Double in a Year, UBS Says

U.S. junk-bond defaults could nearly double by the third quarter of next year, led by energy, metal and mining companies under pressure from depressed commodities prices, according to UBS Group AG.

The high-yield default rate may climb as high as 4.8 percent, UBS analysts wrote in a note to clients Thursday. The default rate for speculative-grade debt in the U.S. was at 2.5 percent at the end of September, according to Moody’s Investors Service, up from 2.1 percent in the second quarter and 1.6 percent a year earlier.