Moody’s Sees Global Default Rate Falling Below Average in 2025

Moody’s Ratings anticipates the global trailing 12-month default rate for speculative-grade companies falling to 2.2% by the end of 2025, according to a report from the credit ratings firm dated Feb. 28.

• The decline in the rate would be driven by factors including “largely stable” growth environment, central bank rate cuts and accessible capital markets, according to analysts including Sharon Ou
  • Long-term average rate is 4.2%; at the end of 2024 the rate was 4.8%
  • Expectations may be tempered or reversed if trade or other policies from the new US administration lead to slower growth
  • Ongoing military conflicts and geopolitics ...