Default rate – expert opinion from Sienna Private Credit

A pessimistic projection is announced by the rating agencies and asset management companies. The European Central Bank’s deposit rate is expected to rise to 3% and the European default rate is expected to increase as well, a forecast that could undermine corporate profits in the eurozone.

Hugo Thomas, Head of Credit Analysis at Sienna Private Credit, commented in Private Debt Investor on the rising default rate: “As default rates rise, recovery levels could fall too, because a rush of defaults would set off sales and increase supply of distressed assets, therefore reducing their price”. Click here to discover the article.