More companies around the world defaulted on their debts in the first three months of this year than in any quarter since late 2020, when businesses were still hamstrung by restrictions to stop the spread of Covid, media reports said on Tuesday.
In a report on Tuesday, credit rating agency Moody’s said 33 of the corporations it rates defaulted on their debts in the first quarter, the highest level since the last quarter of 2020 when 47 companies defaulted. Almost half, or 15 companies, defaulted last month – the highest monthly count since December 2020, CNN reported.
Defaulting firms included Silicon Valley Bank, which collapsed in March, its holding company SVB Financial Group and Signature Bank.
The failure of the two lenders last month sparked panic among investors and customers at US regional banks and knocked confidence in the global banking sector more broadly.
“While financial sector defaults were noteworthy, most defaults continued to reside in non-financial sectors last month,” Moody’s said, noting that US sports broadcasting company Diamond Sports Group posted the biggest default by dollar amount, CNN reported.
Many firms have been hit hard over the past year by a mix of rising interest rates, high energy prices and a dimming outlook for global economic growth. In the UK, the number of companies falling into insolvency last month far exceeded levels seen during the pandemic, when government support helped keep businesses afloat, CNN reported.
The number of corporate insolvencies rose 16 per cent in March, compared with the same month last year, data from the UK Insolvency Service showed Tuesday.
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