Geopolitical concerns and excessive reliance on foreign demand for U.S. fixed income assets were viewed by fixed-income professionals as the top risks to U.S. credit markets over the next 12 months, according to a survey by Fitch Ratings.

The survey was taken during Fitch’s Morning Credit Brief Conference held in New York on October 19. The 250 survey participants, representing a diverse mix of U.S. credit market professionals, answered questions either live at the event or online during the event Webcast.

When asked which factors posed the greatest risk to U.S. credit markets over the next 12 months, ‘geopolitical risk’ was chosen most often among participants, followed closely by ‘excessive reliance on foreign demand for U.S. fixed income assets.’ This is in contrast with the views of the senior institutional investors surveyed in June who placed shareholder-oriented activities as the top concern.

“Clearly the volatile geopolitical climate continues to trouble investors. From Fitch’s perspective, however, shareholder-friendly activity remains a key risk factor for U.S. bondholders,” said Robert Grossman, chief credit officer, Fitch Ratings.

The survey also found that CDS usage is expected to continue to increase. Approximately 67% of respondents whose organizations are active in the credit derivatives markets said they expect CDS usage to increase over the next year.

Among the survey’s other findings: approximately 67% of those surveyed believe that the U.S. high yield default rate will move higher over the next 12 months, compared with 28% who said it will remain about the same; and, CAPEX and dividends were the two most frequently cited ways that those surveyed believe U.S. companies will use cash over the next 12 months.