A major credit event could be coming

Roger Montgomery, Chief Investment Officer at Montgomery Investment Management, is worried about rising default levels in the US. “I’m very concerned that we’re about to see some sort of credit event,” he said in a recent interview. “Between now and 2020… we’re going to see in the US alone, something like $947b be refinanced, and that’s junk bond debt. Now in 2020 alone it’s $400b, it is the most ever.” His concern is not just that it will be refinanced at higher rates, but that it won’t be refinanced at all. While it’s the oil & gas industries that are getting all the attention, Moody’s has warned of this spreading to other sectors. He identifies the telecommunications sector as being heavily indebted also. “In 2015 we saw 105 defaults in the US, and that was double the year prior.” In the full interview he also gives his thoughts on Sydney Airport: (VIEW LINK)