US and Euro HY Default Rates: July 2025
Winnie Cisar - Global Head of Strategy, CreditSights
Logan Miller - Head of European Strategy, CreditSights
Luke Jensen - Analyst, Quantitative Strategy, CreditSights
13 August 2025
Insights into July 2025 US and Euro High Yield Default Rate Trends, Sector Shifts, and Distress Signals, including:
- Comparative Trends in US and Euro HY Default Rates: Examine the latest issuer-weighted and debt-weighted default rates for both markets, with a focus on July’s notable declines and narrowing regional gaps.
- Sector-Level Shifts in High Yield Defaults: Discover which sectors, including Leisure, Media, and Transportation, drove changes in default rates and distress ratios this month.
- Key Drivers of HY Market Distress Ratios: Understand the factors behind recent movements in distress ratios, and see how single-issuer changes are impacting sector-level results.
- Special Situations and Bankruptcy Headlines: Learn about recent Chapter 11 filings, distressed exchanges, and other notable events shaping the US and Euro HY landscape.
- Forward-Looking Risk and Market Implications: Get insights into defaults on the horizon and what these trends mean for investors and risk managers navigating the high yield space.
Executive Summary
- The US HY issuer-weighted LTM default rate fell 11 bp to 2.8% in July; the debt-weighted default rate fell 16 bp to 3.1%.
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The Euro HY issuer-weighted LTM default rate fell 60 bp to 2.0%, while the debt-weighted default rate dropped by twice that amount, falling 120 bp to 2.6%.
- At the US sector level, Leisure had the only notable change, with its rates falling to 0.0% from 2.1% issuer-weighted and 2.4% debt-weighted in June. Media and Transportation saw rate increases driven by decreased issuer counts and face values, with no new defaults in either sector.
- The US HY distress ratio was 6.8% as of August 12, down 29 bp from last month’s update and continuing the decline from its April month-end peak of 10.0%. Media remained the highest sector at 27.9%, with all sector-level shifts driven by single-issuer changes in distressed counts.
- The Euro HY distress ratio rose 17 bp to 6.7%, reversing its downward trend from the April peak of 8.5% and narrowing the US-Euro gap to 11 bps from 57 bp. Similar to US HY, Media maintained the highest distress ratio (16.7%) and all sector-level shifts were single-issuer changes in distressed count.
US & Euro HY Default Rates
The charts below show the issuer-weighted and debt-weighted LTM default rates across the ICE BofA US and Euro HY indices.
The US HY issuer-weighted LTM default rate decreased to 2.8% in July from 3.0% in June. he debt-weighted default rate had a similar decline, falling to 3.1% from 3.3%. There were no new defaulters in July—the only change was AMC’s (AMC) July 2024 distressed exchange aging out of the LTM default cohort. There is a default on the horizon for next month’s update, as Innovate (VATE) executed an exchange of 2026 senior secured notes (US Special Situations: Innovate completes refi transactions, extends debt maturities).
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