The phrase
"high default" means that there is a large number or percentage of people or entities who are unable to repay their debts or fulfill their financial obligations.
Full definition
Rising interest rates are likely to result in investors projecting ahead to slower economic growth and the possibility of
higher default rates.
On the other hand, floating rate loans tend to be lower - quality bonds with
higher default risk.
Lenders consider borrowers with damaged credit as risky and charge high interest rates to compensate
for higher default rates.
I ask because at first glance (haven't looked at the report in detail) the graphs are consistent with a simple «higher tuition
means higher default rates» argument.
After the fiscal year 2013 default rates were released, nine for - profit schools and one private non-profit school were imposed sanctions due to
excessively high default rates.
There are
also higher default and delinquency rates found at institutions where graduation and degree completion rates are lower — for example, at some for - profit universities or community colleges.
«junk bond king» wrote a thesis that two percentage points were enough compensation for the
likely higher default rate of a junk bond fund over a corporate bond fund.
The two smallest groups of postsecondary graduates attended private and foreign colleges that both experienced
slightly higher default rates.
On the other hand, banks argue that the debt is unsecured and made to young people who lack established credit, a combination that
creates high default rates.
Therefore, such bonds pay a lower interest rate, or yield, than bonds issued by less - established companies with uncertain profitability and
relatively higher default risk.
The lower the default risk, the lower the required interest rate;
higher default risks come with higher interest rates.
It was nothing against CA, but the data showed a
very high default rate in the state.
«By testing different retirement plan saving rates that are shown online to individuals, we have evidence to support that employers should not worry about «pushing the envelope» and suggesting
higher default levels,» says Richard Mason, head of behavioral finance at Voya.
In economies that have significant private debts, growth is limited, because of
higher default probabilities / severity, and less capability of borrowing more should defaults tarry.
Stewart particularly likes REITs that have a greater percentage of nonagency debt, despite the theoretical risk
of high defaults.
Junk bonds
carry higher default risk and are thus far more sensitive to the health of the economy than investment - grade bonds.
These types of loans also carry other risks, such as demand provisions under which a bank can arbitrarily demand repayment, as well
as high default rates, putting borrowers in a difficult spot.
Many employers are reluctant to
suggest higher default contribution rates due to a concern that their workers might blindly accept what is not in their best interest, or that they might get intimidated and opt out of the plan altogether,» says Dr. Shlomo Benartzi, senior academic advisor to the Voya Behavioral Finance Institute for Innovation.
Corinthian grads face difficulty finding employment in their field and consequently suffer
from high default rates.
Offering successful track record of prioritizing
high defaulting accounts and performing solid follow up, with proven abilities to acquire payments in a timely manner.
For example, the yields on CCC - rated high yield bonds are quite low on a 10 - year basis given the
historically higher default rates in this low - quality portion of the market.
This would imply that it would make sense to skew investments towards higher rated borrowers (A & B), as the total return will likely be higher after accounting for the
expected higher defaults in C and lower borrowers.
It wasn't until new issues slowed and ceased that the
true high default rate was seen.
These recently released data, as well as other, more comprehensive data on default and loan repayment, can assist policy efforts to lower
persistently high default rates.
Another determining factor in
how high default rates will go is the extent of the housing crisis, according to Niswander.
It sounds as if the private teacher preparation system in Texas comes very close to the scandalous and very expensive (to students, parents, and the federal government - through
very high default rates on guaranteed student loans) «private college» system which is currently being forced to clean up its act.
Much like dealing with sub-prime mortgages or bad credit auto loans, businesses merely shift their risk to account
for higher default rates, missed payments and the need for repossession, garnishment or other legal actions.
Due to the fact that borrowers experienced a
much higher default rate on taxes and insurance when 100 % of the funds were taken at the initial draw, HUD changed the method by which the funds would be available to borrowers which no longer allows all borrowers access to 100 % of the Principal Limit at the close of the loan.
Possibly part of the reason that the default rate has declined is that the overall enrollment in proprietary schools slightly decreased and sanctioning institutions with
excessively high default rates from accepting federal loans as payment.
High - yield, lower - rated («junk») bonds generally have greater price swings and
higher default risks.
If banks take deposits and hoard cash, the economy could contract, and if banks lend without regard for the borrower's ability to repay,
high defaults could cause credit to seize up.
But those loans performed dismally, helping to generate what were at the time
the highest default rates in history, he said.
Sure,
higher default, but higher reward.
The downside to this type of lending is
the high default rate.
Phrases with «high default»