Default, Transition, and Recovery: U.S. Credit Estimate Default Forecast To Rise To 4.75% By September 2027

This report does not constitute a rating action. Chart 1 This is our inaugural edition of our U.S. credit estimate default forecast. Credit estimates are point-in-time, confidential indications of our likely rating on unrated entities or instruments. Corporate credit estimates are primarily used in our analysis of middle-market CLOs. These are not the same as our long-term credit ratings, but they do offer a view of direct lending market, which is the largest strategy within private credit. S&P Global Ratings currently has over 4,000 unique credit estimates outstanding For more information on how credit estimates are derived and their meaning, please see"Credit FAQ: Anatomy Of A Credit Estimate: What It Means And How We Do It ,"Jan.

...In its inaugural credit estimate default forecast, S&P Global Ratings expects the default rate to reach 4.75% by September 2027, a 145 basis-point (bp) increase from the current rate, given persistent inflation, rising rates, and the expectation for slower growth and tighter Fed policy ahead....

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