(ANSA) – MILAN, AUGUST 22 – S&P expects the 12-month default rate of speculative-grade European corporates (i.e. groups with a CCC + rating or lower) to reach 3% by June 2023 from 1.1% of June 2022: In this baseline forecast, 24 speculative-grade companies would default against a backdrop of slowing economic growth, rising rates and falling profit margins.
It can be read in a report by S&P Global Ratings, according to which the probabilities of recession are increasing for Europe, although not as much as the United States risks, also due to the invasion of Ukraine by Russia and the pressures inflationary associated with it, largely linked to energy.
Firms remain relatively solid and therefore able to withstand a slight downturn, but if a prolonged or deep recession occurs, S&P expects a further increase in defaults, with a default rate of 5% by June 2023, in its pessimistic scenario. .
“Interest rates remain low in Europe, but are rising, while consumer confidence and high energy prices remain a risk, especially ahead of the winter,” concludes the S&P report. (HANDLE).
Source: Ansa
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