Deutsche Bank warns companies from imminent default
(MENAFN) Deutsche Bank has cautioned that a cycle of boom and bust is going to come back this year and a wave of company debt defaults is looming, especially in the United States and Europe.
Based on the bank’s yearly report issued on Wednesday, defaults by firms are going to become more usual in comparison with the previous two decades.
Deutsche assumes default prices to reach its highest point in the last 3 months of 2024. The bank expected peak default rates to stand at 9 percent for United States high-yield debt, 11.3 percent for United States loans, 4.4 percent for European high-yield bonds, as well as 7.3 percent for European loans.
The valued United States loan peak default rate is a close to a record high, in contrast with a peak of 12 percent throughout the 2007-2008 world monetary disaster and 7.7 percent during the dot-com bubble at the end of 1990s, the report displayed.
“Our cycle indicators signal a default wave is imminent,” Deutsche economists stated. “The tightest Fed and ECB policy in 15 years is colliding with high leverage built upon stretched margins.”
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