U.S. interest rates have surged recently as concerns about a potential recession have

edged. That's made it more expensive for companies to borrow money. So what could that mean for the health of

corporate America? I'm Allison Nathan and this is Goldman Sachs exchanges.

On this special episode we're breaking down the concerns around corporate credit that were the topic of our most recent top of mine report

now available on gee.com. We dig into whether the higher for longer interest rate environment

could lead to distress or even a wave of defaults

across the corporate credit market.

We speak with Boez Weinstein, founder and CEO of Saba Capital Management, and Goldman Sachs

as chief credit strategist

Lot v. Carrey is generally optimistic about corporate America's

credit outlook.

He believes that healthy fundamentals should allow most corporates to weather the

more challenging borrowing

environment. We've seen a sharp rise in interest rates and the narrative is

rates are going to be higher for longer. How concerned are you that we're nearing

the end of the benign credit cycle and the beginning of a major default cycle?

Well, I think the risk of a full-blown default cycle is still fair and low at least if we're talking about the next 12 months and by full-blown default

cycle I really mean an environment at which defaults spike to double-digit

levels. What is more likely in our view is just continued reversion

towards the longer an average of 3.5%

annual default rate if I take the US leverage finance space as a benchmark.

And that's our baseline view for year in 2003.

...