Time for credit investors to be selective: Nicola Marinelli column

Time to be selective

Nicola Marinelli

The world is experiencing reasonably positive cyclical GDP growth, while many companies are experiencing Ebitda growth that further strengthens their balance sheets and liquidity position. These forces should be positive for credit risk (and also commodity prices). In fact, the default rate of high yield companies has recently touched a new post-crisis low, with Moody’s revealing that its global speculative grade default rate stood at 3.2% at the end of 2010, a sharp decline from 13.1%