Both Fitch Ratings and S&P Global Market Intelligence are reporting that default rates are soaring beyond levels seen since 2008 - largely being pushed by retail bankruptcies (e.g., JC Penney, J. Crew and Neiman Marcus). Retail accounts for more than 18% of loan defaults year-to-date. Fitch expects that rate to rise from 15.5% in the retail sector to 19% by the end of the year. 

The previous record for defaults in the retail sector was 9.3% in August 2019 (i.e., coming out of the 2008 financial crisis).

Interestingly, while the leveraged loan market moved to a cov-lite model after 2008, August was nevertheless a record breaker for amendments/covenant relief.

S&P Global: Retail sector defaults soar to record high in US leveraged loan market

Fitch: Record number of defaults expected

Chart Source:  S&P Global