NEW YORK--(BUSINESS WIRE)--Fitch Ratings projects the U.S. high yield default rate will finish in the 1.5-2% range in 2015, a projection that incorporates the impending one for Caesars Entertainment Operating Co., according to Fitch's 'U.S. High Yield Default Insight' published today.
Caesars would add 90 bps to the rate. The company's Dec. 15 missed interest payment will be reflected in the January rate.
Fitch's projections are based on strong third-quarter company financial data and minimal debt maturities due in 2015. The forecast is well below Fitch's 4.3% 34-year historical default average, but in line with its current 1.9% median rate. Fitch has forecasted U.S. GDP growth of 3.1% in 2015 and 3% in 2016, with private consumption a key driver supported by rising household disposable income and labor market strengthening.
Amid the recent plunge in global oil prices, the high yield energy segment will remain a key focus in 2015 with approximately $77 billion of debt outstanding for energy issuers rated 'B-.' Fitch believes that less-competitive shale-oil producers rated 'B-' and below are at the greatest risk of default.
The full 'Fitch U.S. High Yield Default Insight (2015 Outlook)' is available at 'www.fitchratings.com.' This report is an update to a comment published in early December, and provides a comprehensive look at key statistics and drivers across the U.S. leveraged finance sector.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: Fitch U.S. High Yield Default Insight (2015 Default Outlook)