Corporate Debt Defaults Exceed Average; Remain Lower Than Previous Quarters

The dollar volume of corporate debt that defaulted in the first quarter of 2003 dropped far below the record amounts that defaulted in previous quarters, but the rate of defaults remains above average, according to Standard & Poor’s Risk Solutions. So far this year, 38 companies globally have defaulted on $11.3 billion of debt. The rate of corporate defaults is expected to remain high throughout the rest of the year, though not at the high water marks reached in 2001 and 2002. ‘The $11.3 billion that defaulted in the first quarter is a welcome break from the unprecedented volume of defaults in recent years and is well below the $181.7 billion that defaulted in all of 2002,’ reported Brooks Brady, Associate Director for default research at Standard & Poor’s Risk Solutions. ‘Globally, default rates remain above average and are expected to remain so throughout the rest of the year.’


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