DISTRESSED DAILY: Moody’s Sees Growing Distressed Debt Swap Risk

Distressed debt exchanges are poised to rise in 2023 as credit conditions worsen and companies seek ways to manage their liabilities, Moody’s Investors Service wrote in a report Monday.

Private equity-backed companies that are highly levered look most at risk, as many of those companies face unsustainable capital structures, analysts Julia Chursin and Christina Padgett wrote in the report. Moody’s added a number of new PE-backed firms to its list of companies of concern last year.

The credit grader predicts that the US default rate will rise to 5.9% by December, breaching the historical long-term average of 4.7%. Its pessimistic ...