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ARTICLE · 20 SEPTEMBER 2007

S&P Warns A Big Increase In Debt Defaults Is Coming

Cooley LLP
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In an article entitled "Defaults wave to hit corporate US," the Financial Times reports that Standard & Poor's is predicting that $35 billion in corporate debt will go into default by the end of 2008. This is similar to the view taken by Moody's, reported in a recent post.

United StatesStrategy
Robert Eisenbach
Robert Eisenbach
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Originally Posted in Cooley Godward Kronish LLP’s In The (Red) Business Bankruptcy Blog, September 19, 2007

In an article entitled "Defaults wave to hit corporate US," the Financial Times reports that Standard & Poor's is predicting that $35 billion in corporate debt will go into default by the end of 2008. This is similar to the view taken by Moody's, reported in a recent post.

According to the Financial Times, S&P believes that the slowing economy, together with liquidity issues caused by credit market problems, puts approximately 75 issuers of junk debt at a high risk of default. These companies are primarily in the media, healthcare, and consumer products industries. Not surprisingly, S&P believes that the default rate could go up significantly if the economy were to decline more than currently predicted.

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