And 105 In 2019, And The Lowest In 10 Years

Spain: Defaults In 2021 Amounted To 54, Well Below The 216 In 2020


Santander Corporate & Investment | HY de­fault rates re­main low and are ex­pected to re­main so th­rough 2022. The number of de­faults in 2021 was the lo­west in the last 10 years. There were 4 de­faults in December, the same number as in November, mainly by Chinese cons­truc­tion com­pa­nies; so the total number of de­faults in 2021 was 54, well below the 216 in 2020 and 105 in 2019, and its lo­west value in the last 10 years (since the 53 de­faults in 2011).

Economic recovery and high liquidity levels are keeping default rates low, despite the impact of the pandemic, supply chain strains, labor shortages and high inflation.

In addition, Moody’s expects the defaults environment in 2022 to remain benign, thanks to economic growth that it expects to stabilize and financing conditions that will remain largely favorable despite potential monetary tightening.

As such, the default rate has continued to decline in December to 1.7% (vs. 2% in November and 3.3% pre-pandemic levels) and, looking ahead, Moody’s puts its 12-month global default rate forecast at 2.4%, slightly above its current rate.

By geography, December HY default rates have been set at 1.2% in both Europe and the US, while Moody’s expects a greater rebound in rates over the next 12 months in the US (to 2.6%) than in Europe (to 2.3%).

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