Portfolio managers turn bullish on default rates, finds IACPM

Loan portfolio managers at banks have become increasingly bullish on credit fundamentals, according to the most recent quarterly survey of members of the International Association of Credit Portfolio Managers. But while most of those surveyed (68%) expected default rates to fall in the next 12 months, views were more evenly split on the likely direction for credit spreads. Few expects North American investment grade corporate spreads to widen in the next few months, but the remainder are split between those who expects spreads to tighten and those who expect them to remain unchanged.