The global default rate is expected to climb to 6.3 per cent over the next 12 months and it could reach 10 per cent should the US sink into a protracted recession, Moody’s Investors Service said on Thursday.
“The storm is gathering for default rates moving up,” said Kenneth Emery, Moody’s director of corporate default research.
Fellow rating agency Standard & Poor’s also warns that credit conditions are deteriorating. “We have long been proponents of the view that the credit euphoria of the prior boom years beginning with 2003 would necessitate a shake-out and purge,” S&P said in a recent report.
“This would result in substantially higher downgrades and defaults, concentrated in the US, but not without repercussions in other parts of the world.”
Sunday, 10 August 2008
Deflation Watch: Corporate Defaults to Rise Sharply
Financial Times: Corporate Debt Default 'Could Reach 10%'
Posted by London Banker at 09:04