JPMorgan Shows Why US Default Rate Is Less a Worry for Investors
- Debt exchanges gain as way to tackle distressed situations
- Par weighting puts default rate at 3%, half of Moody’s metric
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JPMorgan Chase & Co.’s Nelson Jantzen has a calming notion for investors alarmed by the US corporate default rate rising to almost 6% by one calculation.
About half the volume of corporate debt included in the default rate in one measurement isn’t wholly a problem for investors, at least not now. In another analysis, the speculative-grade default rate is actually closer to about 3% at the end of March, according to Jantzen, a head of US high yield and leveraged loan strategy.