Credit portfolio managers at banks believe that spreads will widen over the next three months, according to a survey by the International Association of Credit Portfolio Managers. The members of the association also believe that defaults will increase in the next 12 months.

However, the survey indicates that loan portfolio managers are turning more bearish. In the previous version of the asssociation’s quarterly “credit outlook index” credit portfolio managers had predicted that spreads would tighten in the second half of this year.

The association asked its members, which include credit portfolio managers from 87 banks in the US, Europe and Asia, to rate their outlook on the credit environment on a score from 100 (positive) to -100 (negative). In March the index score was +14.8 whereas in the latest survey the result was -69.1.

Respondents expected greater spread widening for high yield and crossover names that investment grade credits in both North American and Europe, and were most bearish on North American high yield credit (with a negative score of 78.8).