...Capex Slashed: During the LTM ended September 2015, high-yield issuers slashed aggregate capex and dividends by 15.5% and 43.0% respectively compared to 2014 in an effort to conserve cash. Excluding about $4 billion of acquistions by JBS, the combined FCF improved to $890 million from negative $3.8 billion in 2014. The aggressiveness of the cuts means companies may not be able to respond to additional downward pressure in 2016. High Default Risk: Defaults remain at a level not seen for the past decade, with eight issuers defaulting on USD4.5 billion of debt during 2015. About one-third of the defaults are related to Brazilian construction companies tied to the Petrobras Lava Jato scandal. Currently, 10 issuers have a high possibility of default during 2016, while default is considered imment for another four issuers. New Year, Old Fear: Downgrades will continue to outpace upgrades for the high-yield Latin American corporates as 32% of issuers have either a negative outlook or negative watch...
