FTI sulting(US:FCN) Globenewswire·2026-02-17 12:30Core Insights - The 2026 Leveraged Loan Market Survey by FTI Consulting indicates a cautious outlook among lenders due to high loan default volumes, fraud concerns, and uncertainty regarding AI investments [1][2]. Lender Sentiment - Loan default volumes are above average, and liability management exercises are ongoing, leading to a cautious environment for leveraged lenders [2]. - Retail and consumer products are viewed as the sectors most likely to face distress, followed by restaurants and healthcare, with real estate dropping in concern from second to seventh place [3]. Fraud Concerns - Only 21% of lenders expressed strong confidence in fraud risk oversight within the leveraged credit market, while 60% were somewhat confident and 19% lacked confidence [4]. AI Investment Perspectives - 53% of respondents believe AI will enhance information flow in the coming years, but 21% consider an AI investment crash as a significant underestimated risk for 2026 [5]. Loan Market Expectations - A majority of respondents (50%) expect loan yields to widen slightly in 2026, contrasting with 43% who anticipated yields to contract [5]. Default and Economic Outlook - Over three-quarters of respondents expect loan defaults to increase slightly (58%) or substantially (19%) in 2026, a more pessimistic view compared to the previous year [6]. - Expectations for the Fed Funds rate have moderated, with 73% anticipating it to end between 3%-4% by year-end, indicating limited rate cuts [6]. - About 40% of respondents foresee stagnant or negative GDP growth in 2026, a significant shift from the previous year's optimism [6]. - While 68% consider the likelihood of a recession minor or negligible, nearly one-third view it as material or likely, reflecting increased pessimism compared to last year [6]. Survey Methodology - The survey was conducted among large bank and non-bank lenders from November 18 to December 19, 2025, including various financial institutions and senior executives [7].