Corporate defaults could reach 10%

Chemical company CFOs need to step up their monitoring of customers’ creditworthiness. That’s the clear message today from ratings agency Moody’s, who report that corporate defaults are rising sharply.

According to Moody’s Director, Kenneth Emery, ‘the pace of corporate defaults increased considerably in July as economic conditions weakened and more companies experienced financial distress. Under our baseline model forecast scenario, the global default rate is expected to climb sharply over the next twelve months to 6.3%, while it could reach 10% in a downside scenario of a protracted U.S. recession.’

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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