OREANDA-NEWS. With 32% of Fitch-rated issuers carrying either a Negative Outlook or on Negative Watch, and 16% rated 'CCC' or below, downgrades and high default risk will be a constant for LatAm high yield corporates, according to a new Fitch Ratings report.

"Defaults remain at a level not seen for the past decade, with eight issuers defaulting on USD4.5 billion of debt during 2015," said Joe Bormann, Managing Director at Fitch. "Ten issuers have a high possibility of default during 2016, while default is considered imminent for another four."

"Capex and dividends have been slashed by high yield issuers. But the aggressiveness of the cuts means companies may not be able to respond to additional downward pressure in 2016."

High-yield issuance in 2015 was mild compared to 2014. Eight issuers raised $8 billion compared with 37 issuers and $26 billion in 2014.

Investors continue to shun corporates in the 'B' category due to the small issuance size of the bonds, which limits secondary market activity. Slow growth prospects have left many 'BB' rated corporate bond issuances unattractive.