OPENING DISCLAIMER: This publication provides credit risk analysis and market information for educational purposes only. It does NOT constitute investment advice, recommendations, or an offer to buy or sell any securities. Recipients should conduct their own analysis and consult qualified advisors before making any decisions.

The credit risk landscape on December 4, 2025 shows tight credit spreads masking sector-specific stress, with high yield OAS at 294 bps [Federal Reserve FRED, December 4, 2025, High] (historical tights) while commercial real estate CMBS delinquencies hit record 11.8% for office properties [Federal Reserve, December 4, 2025, High]. The Challenger report released December 4 confirmed 1.17 million U.S. layoffs YTD—the highest since 2020—[Bureau of Labor Statistics, November 2025, High] driven by DOGE-related government cuts [Reuters, December 2025, High] and tech restructurings. Central banks remain in easing mode: the RBI cut rates December 5, the Fed is expected to cut December 10, and the BoJ may hike December 18-19 in a compressed meeting calendar.

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Fortna Group Inc. downgraded to CCC- by S&P Global on December 4, 2025 [S&P Global, Fortna Group Inc., December 4, 2025, High], with negative outlook citing cash burn and elevated default risk. The logistics/supply chain company faces material credit stress heading into year-end.

North American Builders Supply filed Chapter 11 on December 3, 2025 [PACER Case No. 25-18572, Illinois Northern Bankruptcy Court, December 3, 2025, High], with tariff-related construction cost pressures cited as a contributing factor. Financial details remain undisclosed but the filing reflects broader building materials sector stress.

China Vanke bondholder meeting scheduled December 10 to vote on onshore bond repayment delay [Reuters, November 28, 2025, High]. S&P downgraded Vanke to CCC- on November 28, warning that debt restructuring is "increasingly likely" given $1.6 billion in maturities due between December 2025 and May 2026 [S&P Global, China Vanke, November 28, 2025, High].

Braskem Idesa (Mexico) entered grace period November 18-19 after missing coupon payment on senior secured bonds [S&P Global, November 20, 2025, High]. Fitch downgraded to 'C' from 'CC'. If grace period expires without payment, 25% of bondholders can accelerate the notes [Bloomberg, November 20, 2025, High].

Sector implications: Digital advertising (Teads), broadcast media (Urban One), luxury automotive (Aston Martin), and European debt collection (Lowell) show elevated stress. Chinese property sector crisis continues with Vanke and Country Garden restructurings underway.

Federal Reserve concluded quantitative tightening on December 1, 2025, removing a significant headwind for Treasury and credit markets. The December 9-10 FOMC meeting [Federal Reserve, December 2025, High] is pricing 88% probability of a 25 bps cut [CME FedWatch Tool, December 4, 2025, High] to 4.50-4.75%. The Fed also finalized leverage capital rule modifications on November 25 (effective April 1, 2026), reducing Tier 1 capital requirements for GSIBs by ~2% to improve Treasury market intermediation [Federal Reserve, November 25, 2025, High].

Reserve Bank of India cut the repo rate 25 bps to 5.25% on December 5, 2025—the fourth cut in 2025 totaling 125 bps of cumulative easing [Reserve Bank of India, December 5, 2025, High]. GDP forecast raised to 7.3% for FY26 [Reserve Bank of India, December 5, 2025, High].

Bank of Japan Governor Ueda stated December 1 that the BoJ is "weighing pros and cons" of raising rates at the December 18-19 meeting [Reuters, December 1, 2025, High]. Most economists expect a 25 bps hike to 0.75% [Bloomberg, December 1, 2025, High], which would be the highest policy rate since 2008.

European Central Bank expected to hold at 2.00% at December 17-18 meeting [Bloomberg, December 2025, High]; Bank of England pricing 60-90% probability of a cut to 3.75% on December 18 [Reuters, December 17, 2025, High].

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December 4, 2025 presented a bifurcated credit risk picture: tight spreads in public markets contrasting with severe stress in commercial real estate and retail sectors. The Challenger layoff data confirming 1.17 million YTD cuts [Challenger, Gray & Christmas, December 4, 2025, High] marks a structural labor market shift driven by AI and government restructuring. Central banks remain in easing mode globally with four major meetings compressed into December 9-19, creating potential for coordinated policy moves. The primary systemic risks center on the $957 billion CRE maturity wall [Federal Reserve, 2025, High], French sovereign stress spilling to European banks [European Central Bank, December 2025, High], and year-end liquidity [Federal Reserve, December 2025, High].

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Publication Date: December 5, 2025

Analysis Period: November 28 - December 5, 2025 (7 days)

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