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European corporate default rate to spike: S&P Global - Metro US

European corporate default rate to spike: S&P Global

Outbreak of the coronavirus disease (COVID-19) in Frankfurt

LONDON (Reuters) – Europe’s speculative-grade corporate default rate is expected to more than treble to 8.5% by next March rating S&P Global said on Monday, though in a more pessimistic scenario it could leap as far as 11.5%.

S&P said its baseline 8.5% forecast would see at least 62 speculative-grade companies default. A more optimistic 3.5% default rate would see 25 defaults, whereas the pessimistic 11.5% outcome would see 84 defaults.

“Expansive monetary and fiscal support could lessen defaults over the near term, but much assistance to date adds to existing debt piles at a time when basic revenue is lacking,” S&P said in a report.

(Reporting by Marc Jones; editing by Simon Jessop)

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