Credit Market Outlook

Apollo Chief Economist

Our latest outlook for credit markets is available here, key charts inserted below.

Credit market outlook: Default rates rising, but credit spreads remain tight
Thematic credit investing
Source: Apollo Chief Economist
Table of contents
Source: Apollo Chief Economist
A default cycle has started
Source: Moody’s Analytics, Apollo Chief Economist
Global recovery rates
Source: Moody’s Analytics, Apollo Chief Economist
IG ICR coming down
Source: Bloomberg, Apollo Chief Economist
HY ICR coming down
Source: Bloomberg, Apollo Chief Economist
Bonds more attractive than equities
Source: Bloomberg, Apollo Chief Economist
Credit metrics for leveraged loan deals: ICR and cash flow down. Leverage up.
Source: Pitchbook LCD, Apollo Chief Economist
Rise in yields due to rising risk-free rates
Source: ICE BofA, Haver Analytics, Apollo Chief Economist
Divergence between and US and Europe lower rated junk bond spreads
Source: Bloomberg, Apollo Chief Economist
Corporate bond issuance
Source: SIFMA, Apollo Chief Economist
Secured HY bond issuance volume
Source: Pitchbook LCD, Apollo Chief Economist. Note: A secured bond is a bond backed by collateral.
High yield leverage rising recently
Source: Bloomberg, Apollo Chief Economist. Note: The lines show net leverage and total leverage for the median companies in the H0AO index.
Regional bank spreads have widened recently
Source: ICE BofA, Bloomberg, Apollo Chief Economist. Note: Unweighted average spreads of bonds from ICE 5-10 Year US Banking Index, C6PX Index for bonds issued before Jan 1, 2023. There are eight banks in the Regional index and 41 banks in the Diversified index. Regional banks include BankUnited Inc, Citizens Financial Group, Huntington Bancshares Incorporated, Regions Financial Corporation, Truist Financial Corporation, Webster Financial Corp, Wintrust Financial Corp, Zions. Diversified banks include JP Morgan, Citibank, Bank of America, etc.

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