Distress Exchange Leads to Re-Default Half the Time: Moody’s

Around half of distressed exchanges fail to prevent another restructuring or bankruptcy filing, according to a report by Moody’s, citing historical data.

• About 46% of the distressed exchanges that took place in 2023 have already re-defaulted, the ratings firm said
  • Most of these debt deals re-defaulted in less a year, compared with the historic average of 3.5 years
• The average recovery for first-lien loans in distressed exchanges stood at 71% by the end of 2024, improving from 55% in 2023, the research showed
• The number of distress exchanges is expected to remain high this year, with defaults potentially rising from ...