S&P warns of possible trebling of U.S., European default rates

Follow us on Google News:

LONDON (Reuters) - Credit rating firm S&P Global has warned that speculative-grade U.S. and European corporate default rates are likely to double and might even treble next year as rising borrowing costs take their toll.


The firm estimated that the "trailing-12-month default rates" in the U.S. and Europe would reach 3.75% and 3.25% respectively by September, more than double the 1.6% and 1.4% in September 2022.

With so much depending on the length, breadth and depth of a potential global economic downturn, however, S&P added that "pessimistic forecasts for default rates of 6.0% and 5.5% aren’t out of the question".

"We expect credit ratings to deteriorate, as credit fundamentals - for many corporates and some sovereigns - erode further", S&P's 2023 outlook report said.

(Reporting by Marc Jones; editing by Danilo Masoni)

Disclaimer

The above content is directly sourced from Reuters under a contractual arrangement. The content is being provided as a convenience and for informational purposes only; and does not constitute an endorsement or approval by Kalkine Media of any of the products, services, or opinions of the organization or individual. The user is apprised that Kalkine Media bears no responsibility for the accuracy, legality, or content of Reuters, any external sites, or for that of subsequent links. The user is requested to contact Reuters directly for answers to questions regarding the content. Please note that Kalkine Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.