Uncertainty around US tariffs and trade led to a deterioration in credit conditions amid uncertainty over tariffs and an increase in corporate defaults, according to Moody's.
During the three months ending June 21, a total of 21 companies defaulted on debts worth more than $27 billion, compared to a total of 15 companies defaulting on debts worth approximately $15 billion in the previous quarter, the rating agency explained.
It expects companies in the durable goods sector—including home appliances and automobiles—to account for the majority of defaults next year due to tariff pressure.
The report added that regardless of sector, companies with low credit ratings remain highly vulnerable to tariff-related risks.
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