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Global Junk-Bond Defaults to Reach 2009 Level

Default rate in speculative-grade corporate debt projected to hit 4 percent this year.

By Cordell Eddings, Bloomberg | Updated on March 01, 2016

In 2016, global junk-bond defaults will rise to the highest level in seven years as a prolonged downturn in commodity prices continues to wreak havoc on company profits and balance sheets, according to Moody’s Investors Service.

The ratings company forecasts that the speculative-grade default rate will reach 4 percent this year, up from 3.5 percent in 2015 and the highest level since 2009. The default rate for all of Moody’s-rated corporate issuers is estimated to rise to 2.1 percent, also a post-financial crisis high, from 1.7 percent last year.

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