Distressed-Debt Deals Often End in ‘Hard Default,’ Moody’s Warns

About a quarter of companies that go through a distressed exchange event end up in so-called “hard defaults” such as bankruptcy or a missed payment, according to a Moody’s Analytics report.

While struggling borrowers turn to strategies like distressed debt exchanges, modifications of debt documents or impairments to win time to turn around their fortunes, often those measures fail to land the company on a stable footing.