OREANDA-NEWS. March marked the 11th consecutive month that the institutional leveraged loan universe recorded defaults in the beleaguered energy or metals/mining sectors, according to Fitch Ratings.

Southcross Holdings' filing on Monday ended a six week reprieve of energy and metals/mining defaults in the leveraged loan space since Paragon's filing on Feb. 14th, 2016.

The pace of defaults could pick up again as a few other energy and metals/mining companies remain on the brink, including Peabody Energy, Foresight Energy and Templar Energy. Filings by Peabody and Foresight would propel the metals/mining sector's trailing 12-month (TTM) leveraged loan default rate to roughly 32%, up from 12.9% at end-2015. Meanwhile, the energy sector TTM rate would surpass 12% with defaults for Southcross Holdings and Templar Energy.

"For some companies with commodity price exposures, it's not a question of if they will file, but when," said Eric Rosenthal, Senior Director of Leveraged Finance.

The U.S. institutional term loan market is less affected by the energy and metals/mining sectors, which account for 6%, versus the high yield market where the exposure is 25%.

Sports Authority, Aspect Software and Town Sports International along with Southcross Holdings comprised the $1.4 billion in institutional loan defaults in March. February included defaults for Paragon and Noranda Aluminum Holdings Corp., tallying $1.1 billion.

Despite the energy and metals/mining challenges, institutional term loan issuance is slightly ahead of last year's issuance, at $23 billion. CLO volume has been slightly more impacted, with less than $3 billion compiled through end-February versus $15 billion a year ago.