Rating agency S&P Global expects default rates to keep rising as aggressive rate hikes take their toll on companies faced with an increased cost of funding and looming debt maturities according to a report issued this month.
Reuters reports that default rates are expected to hit 4.5% in the United States by June 2024 from 3.5% in July 2023, and to increase to 3.75% in Europe by June 2024 from 3.1% in July 2023.
According to S&P report the number of new corporate defaults globally rose to 16 in August 2023. This was the highest number for the month of August since 2009.
The global corporate default tally reached 107 as of August 31, with most of the defaults coming from Europe and the United States. Latin America is the pressure point for emerging markets with 13 of the 14 defaults year to date.
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