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While defaults tend to slow down during the summer, last month's
number was well above the 8.6 average for August seen in
previous years.
This brought the global corporate default tally to 107, with
most of the defaults coming from Europe and the United States.
The rating agency expects default rates to keep rising as
aggressive rate hikes take their toll on companies faced with an
increased cost of funding and looming debt maturities.
Default rates are expected to hit 4.5% in the United States by
June 2024 from 3.5% in July 2023, and to increase to 3.75% in
Europe by June 2024 from 3.1% in July 2023, the report added.
Sector-wise, media and entertainment accounted for one third of
defaults in the United States and 25% of the total defaults in
August, while the consumer products sector was the most hit in
Europe, S&P noted.
Defaults in emerging markets continued to lag, but Latin
America-based issuers are seeing an increase, representing 13 of
the 14 defaults across all emerging markets so far this year.
(Reporting by Chiara Elisei, editing by Dhara Ranasinghe and
Chizu Nomiyama)
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