Bankruptcies and defaults gather pace

The number of companies defaulting on their junk-rated debt and filing for bankruptcy in North America is now running at its fastest pace in five years. So far this year, 28 “entities” have defaulted, according to S&P. The defaulted debt of the one Canadian and 27 US companies totals $18.4bn, exceeding the 17 US defaults for all of last year. Moody’s said the US is leading the global default rate for speculative-grade companies, which rose to 1.7% in April, up from 1.5% in March and less than 1% last year. The US default rate, however, rose from 1.8% in March to 2.1% in April. Moody’s expects the global default rate to reach 4.98% by the end of the year, with US defaults reaching 5.7%. In Europe, the rate is currently 0.7%.