By Ovunc Kutlu
ISTANBUL (AA) - US-based financial services firm S&P Global said corporate defaults jumped 80% in 2023 to reach 153, compared to the year before when it was 85.
The US accounted for 63% of defaults, while consumer-facing sectors accounted for 42%, it said Tuesday in a statement.
"Distressed exchanges were the largest driver of defaults in 2023, accounting for over 40% of defaults for the third straight year," it added.
The company said it expects consumer-facing sectors to lead defaults again in 2024 due to higher interest rates.
"We think slower economic growth and higher financing costs will contribute to increasing default rates. We expect the U.S. and European trailing-12-month speculative-grade corporate default rates to reach 5% and 3.75%, respectively, by September 2024," said the statement.
The firm, meanwhile, warned that it expects "mounting pressure on issuers with higher debt burdens."