High yield credit had a strong 2024 as yields rallied and spreads followed, while defaults didn’t blow up as feared. In Europe, the index default rate stands at a low 2.5% and the US at 1.1%, while the share of stressed and distressed bonds drastically came down. Will 1Q sustain those gains, and why? Mahesh Bhimalingam, Bloomberg Intelligence’s chief European credit strategist, discusses the results of the team’s 1Q25 High Yield Survey, along with the market outlook, with Marco Salcoacci, senior high yield fund manager at Union Investments. The report covers investor positioning, sentiment, key return drivers, default and supply forecasts and relative-value opinions by geography, rating and sector. They assess how deeply high yield prospects differ between Europe and the US.