Moody's sees drop in default rate this year

|By:, SA News Editor

Eyeing better growth and sustained low interest rates, Moody's projects the global default rate to drop to 2.2% this year or 61 companies globally, from 2.9% or 66 companies in 2012.

"Additional factors that support our view of a low default rate in 2014 are the continuous accommodative monetary environment together with ample liquidity, which has and will continue to allow distressed companies to access the capital market and reduce refinancing risk in the near future."

For perspective, the average default rate since 1983 is 4.7%. It is indeed a golden age for corporate borrowers.

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