Six defaults in the last 30 days have brought the US trailing twelve month (TTM) leveraged loan default rate back above 3%, Fitch Ratings said in a press release. Operational issues and free cash flow challenges, in tandem with elevated leverage, high interest expense and weak liquidity, pushed several issuers to file chapter 11 or engage in distressed debt exchanges (DDEs) to address near-term maturities. The U.S. Leveraged Loan TTM Default Rate stands at 3.0% by volume and 3.5% by issuer count in October, up from 2.9% and 3.4% in September. YTD default volume as of Nov. 20 is $49.7 billion from 61 issuers, compared with $25.1 billion from 23 issuers over the same period in 2022. There were six defaults over the past month, four of which were DDEs and two were issuers in healthcare.
