Posted 4/16/2024, 4:34:39 PM
Repeat Offenders and Overleveraged Firms Fuel Near-Record Defaults, But Relief May Be Ahead
- 40% of 2023 US corporate defaults were by repeat offenders
- Many defaults were by private equity-owned companies acquired via leveraged buyouts
- Most private equity defaults were distressed debt exchanges to restructure
- Number of distressed debt issuers fell in Q1 2024, signaling default rate should ease
- Moody's expects default rate to stabilize at 4.7% by June and fall to 3.4% by April 2025
