Weak consumer spending in the US means 283 companies are now at high risk of default, credit rating agency Moody's Investors Service has warned.
In its quarterly 'Bottom Rung' list, published on March 6, the agency said there is "ample evidence of a severe default cycle. More than 23% of all US speculative-grade companies are on the list, compared with 9% two years ago." As recently as early 2007, there were only 158 companies on the list, it added.
In the last three months alone, 73 companies have joined the list and only 24 have left it - of which 17 have already defaulted. "Industries with broad exposure to weak consumer spending, such as media, autos, retail and gaming, are highly represented," Moody's commented.
To be on the list, companies must have a Caa1 or lower rating, or a B3 rating with a negative outlook or under review for downgrade. No financial companies appeared on the list.
More on People
Michele Foresti officially resigns from role after failing to receive regulatory approval
James Coulson joins Swiss bank after 18 years at SocGen
Job changes in the derivatives, regulation and risk industry throughout Asia
Hoodless and Madaras among those suspended
Sign up for Risk.net email alerts
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
Nominated for two technology awards
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.