EMD to suffer more defaults than in 2008 financial crisis, Moody's warns - reports

Up to 13.7% default rate

Lauren Mason
clock • 1 min read

Up to 13.7% of "speculative grade" bonds across emerging markets are at risk of defaulting over the next year – a higher level than that seen during the throes of the 2008 Global Financial Crisis, according to Moody's latest forecast.

According to the credit rating agency - as reported by the Financial Times - the default rate for higher-risk emerging market debt last year stood at just 0.8% with seven companies defaulting, including three Chinese firms and Jamaican telecoms company Digicel. However, due to the coronavirus pandemic and its impact on the global economy, Moody's predicts this will jump to between 8.3% and 13.7% between now and the end of March 2021. At the peak of the 2008 Global Financial Crisis, default rates across emerging market credit stood at 13.6%. The long-term impacts of coronavirus on e...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now


Already an Investment Week


More on Economics