It ain’t over: weak markets pose LBO default risk

Two rating agencies this week cast doubts over the outlook for LBO default rates. Fitch warned on Monday that a second wave of medium to long term LBO defaults by 2013 cannot be ruled out. And Moody’s announced on Tuesday that high yield default rates in Europe, the Middle East and Africa could remain as high as 7% in 12 months time if capital markets do not stay open to borrowers looking to ease debt burdens.