| |||||||||||||||||||||||
| |||||||||||||||||||||||
It appears that the tough times are set to get worse in corporate debts markets. Speaking at Argyle Executive Forum's 2008 Leadership in the Distressed Markets conference in New York City Thursday morning, Edward Altman, the director of the Credit and Debt Markets Research Program at New York University's Stern School of Business, laid out some very disturbing predictions for the economy, corporate defaults and credit markets.
In a report slated to be released, Altman forecasts that the junk bond default rate will reach 4.64% in 2008, well above the slim 0.51% in 2007 and the historical average of 3.8%. However, he says that things could turn out to be much worse in the event of prolonged recession.
"If we have a recession like 1991, we could have a default rate higher than ever before," Altman said. "[Under certain models] the default rate could be as high as 16% -- the highest in the history of mankind." "The last three recessions, assuming we're in one now, and those in 1991 and 2001 were preceded by credit meltdowns, there's incredible contagion potential between [the turmoil in] the credit markets and the real economy," he added. "What was going on in the credit was so scary that it had the potential for a meltdown in the broader economy." Illustrating the mounting problems, Altman said, "Defaults didn't start increasing until January 2008, but there were about $4 billion in defaults last month. In all of 2007, there was only about $5.5 billion; in a month it's 80% of all last year." - George White See Bloomberg story on default rates rising See more stories from Argyle Executive Forum's 2008 Leadership in the Distressed Markets conference Categories Deal Video
    Community
 Elsewhere on The Deal.comDealwatchThe Deal MagazineCorporate Dealmaker
The Deal VideoCategories
Blog roll
Archives
| |||||||||||||||||||||||
|
|
|
|
|
©Copyright 2009, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.
