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

FILE PHOTO: The S&P Global logo is displayed on its offices in the financial district in New York

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)

Related posts

Spirit Christmas expands New Jersey holiday pop-ups with new 2025 locations including Toms River

Flight attendant age discrimination suit moves forward in New Jersey court against United Airlines

Judge tosses inmate’s civil rights suit against Gov. Murphy over confinement claims