Overall: Higher-for-longer interest rates, the possibility of recession, and lingering inflation, suggest credit conditions for borrowers in North America will likely deteriorate. Risks: As the maturity wall approaches, the costs to service or refinance debt could be overly burdensome, especially for lower-rated borrowers, in the current interest-rate environment. Commercial real estate (CRE) loan losses could rise amid higher financing costs, declining demand, and volatile market conditions for U.S. regional banks. Ratings: North American corporates' net outlook bias, indicating potential ratings trends, is at negative 10.1%, the highest since July 2021. We expect the U.S. trailing-12-month speculative-grade corporate default rate to reach 4.5% by June next year.