Bankruptcy / Distressed: Corporate defaults running at the fastest pace since 2003

We suspect that it's going to accelerate from here....

The number of companies defaulting on their junk-rated debt and filing for bankruptcy in North America is running at its fastest pace in five years amid the slowing economy and contraction in credit markets.

So far this year, 28 “entities” have defaulted, according to Standard & Poor’s. The defaulted debt of the one Canadian and 27 US companies totals $18.4bn and exceeds the 17 defaults in the US for all of last year.

“As economic conditions deteriorated...and volatility in the financial markets protracted, corporate casualties began to emerge at a rate unseen in years,” said Diane Vazza, head of S&P’s Global Fixed Income Research Group. “The surge of defaults in the early months of 2008 is the first leg of an extended period of high default occurrences that will characterise the rest of 2008 and 2009.”

S&P said the pace of US defaults in the first five months of the year is the fastest since 2003.

Bankruptcies and defaults gather pace -Financial Times

Comments

[corinne]

I agree. The financial markets aren't over with the rough times yet.