Blackstone's Scott Says Credit Risk Better Than Equity Risk Amid Volatility

The video discusses the current state of default rates in high yield and loan markets, noting that they are below historical averages. It highlights market stability, with debt to EBITDA ratios at their lowest since 2018. The speaker argues that credit risk is preferable to equity risk in volatile markets, citing historical data from the financial crisis. Future default rates are expected to rise as the Fed softens its stance, but the market remains stable for now.

What is the current default rate in high yield and loan markets compared to the historical average?

• 2% current, 3% historical average

• 3% current, 2% historical average

• 4% current, 5% historical average

• 5% current, 4% historical average

Why is credit risk considered a better option than equity risk in volatile markets?

• Credit risk is less volatile

• Credit risk has higher returns

• Credit risk has no risk

• Credit risk is more defensive

During the great financial crisis, what was the approximate default rate in the high yield market?

• 3%

• 2%

• 12-14%

• 20%

What is expected to happen to default rates when the Federal Reserve softens its stance?

• Default rates will decrease immediately

• Default rates will increase over 12 to 18 months

• Default rates will not be affected

• Default rates will remain stable

How long does it typically take for default rates to peak after the Federal Reserve changes its policy?

• 36 months

• 24 months

• 12 to 18 months

• 6 months