Defaults Characterise Watershed Year for European Corporate Bonds
Defaults on European corporate bonds rose by roughly 60 per cent in 2002, making it a watershed year for defaults in Europe, according to a new report by Moody’s. ‘Europe has seen a dramatic increase in the overall default rate in 2002, especially in the speculative-grade arena,’ said Moody’s Vice President and Senior Analyst Praveen Varma. The overall default rate increased sharply from 1.8 per cent in 2001 to 2.9 per cent in 2002, a proportional increase of roughly 60 per cent in one year. The rise in the speculative-grade default rate was even larger, soaring to over 20 per cent for 2002 from 12.7 per cent in 2001.