The US leveraged loan market is under pressure:

The default rate for leveraged loans was above 4% for 22 consecutive months, matching the 2008 Financial Crisis streak.

This downturn lasted 2 times longer than during the 2020 pandemic.

However, in November, the default rate fell to 3.7%, officially ending the streak.

Importantly, defaults peaked below 5% this cycle, far below the 8% high posted in 2009.

On the other hand, the 5-year cumulative default rate rose to 16% this year, nearly matching the 17% level seen in 2012.

This comes as the US leveraged loan market has tripled since 2012, to a record $2 trillion.

Leveraged loan investors are seeing large losses.

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