High Yield Recovery Rates Plunge To 35%, Down 16% From A Year Ago And Lowest Since COVID

UBS' credit analyst Matt Mish - who two months sparked a mini crisis on Wall Street when he predicted private credit default rates of 15% - published his April Default Report (available here for pro subs) which saw stable default rates across US and EU credit markets, with US high-yield bonds showing a 2.3% LTM issuer default rate, up 1.1% year-on-year.  Recovery rates, however, declined sharply, down 16% to 35%, which is a big red flag as it means that the quality of loan collateral is rapidly eroding.

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