NEW YORK: Moody's Investors Services said on Wednesday it projected a rise in the global default rate on high-yield bonds and loans in 2015 on rising risk premiums, geopolitical concerns, sluggish global growth and a possible rate increase from the Federal Reserve.
Based on its model, the rating agency said the default rate would climb to 2.7 percent from 2.0 percent in 2014. This implies 76 defaults globally.
The predicted higher level though would still be below a historical average of 4.5 percent.
"An improving U.S. economy, together with healthy corporate earnings and manageable maturity profiles, should keep the default rate low by historical standards," Moody's said in a report released on Wednesday.
Moody's added the recent slide in crude prices, which hit a near six-year low in January and raised worries about boosting defaults in high-yield securities, "should not lead to a spike in the near term default risk."
Still a Moody's risk gauge on the energy industry has jumped. Its "Liquidity Stress Index" on the sector climbed to 9.6 percent in mid-February from 4.5 percent in December.
On the other hand, the index on non-energy industries has held steady at 2.9 percent since January, a 19-month low.
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