Corporate-Default Rates May Top 6% in US, EMEA in the Next Year, Moody’s Says
- Companies are facing escalating costs as earnings shrink
- Drought in new issuance points to tougher conditions
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The share of companies failing to pay debt on time could soar more than threefold in the next year due to a liquidity squeeze and worsening trading conditions, according to Moody’s Investor Services.
“If interest rates continue to surge and the global economic slowdown deepens, weaker speculative grade companies face declining earnings and escalating debt costs. In that scenario, defaults will escalate,” Moody’s analysts wrote in the report published Monday.