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...The water monopoly has come under increasing financial strain as higher interest rates have increased the costs of servicing its £18.3bn debt....
...The rise in debt servicing costs will fuel an ongoing debate over debt forgiveness....
...Construction, real estate and financial services companies were particularly at risk of default....
...It’s not just the default risk, but where the corporate structure the terms of default will apply....
...Among medium-sized firms, 70 per cent will suffer debt-servicing stress....
...In the past three years alone, there have been 18 sovereign defaults in 10 developing countries including the likes of Zambia, Sri Lanka and Ghana — greater than the number recorded in all of the previous...
...Meanwhile, the external debt-servicing costs for poor countries, relative to revenue, have almost tripled in the past decade, leaving 48 nations at or near debt distress....
...The company has said it plans to keep servicing this debt despite the sovereign restructuring....
...“Higher interest rates are putting pressure on indebted corporates through higher debt servicing costs,” said the analysis....
...The budget deficit was set to come in at 6.1 per cent of GDP next year, while interest payments servicing the US debt would rise above $1tn per year by 2026....
...Shearing cited “the cost of debt servicing” and “the rollback of pandemic support” as well as “high energy bills, particularly in energy-intensive sectors”....
...A servicing company placed the loan on watch for possible default — although the Trumps have remained current on their payments....
...He said in an interview last month the government wanted to help “artisans and small businesses” that risked being denied financing because of previous defaults....
...“When the economy slows and we are in a higher rate environment, that’s when we will see a real rise in defaults.”...
...wave of corporate defaults....
...Moody’s has lowered its outlook on the US’s credit rating to “negative” from “stable”, pointing to a sharp rise in debt servicing costs and “entrenched political polarisation”....
...Default is another. The best debt killer is faster economic growth, requiring a leap in productivity....
...A good steer are local authorities, which are rated similarly to the UK government but face higher debt servicing costs because of liquidity risk....
...Debt servicing costs have jumped from 59.5 per cent of total state revenue in the 2021-22 fiscal year to 63.5 per cent in 2023-24....
...As rates have gone up, loan repayments have increased and companies have had to spend more money servicing their debt....
...But he also estimated that more than half of the government’s Rs13.3tn spending would go towards servicing debt....
...Investors are demanding higher returns to take a slice of the pie, and governments will feel the impact of higher debt servicing costs for many years to come....
...The BoE warned last week that British companies faced a higher risk of default as a result of tighter monetary policy, with 70 per cent of medium-sized companies likely to suffer debt-servicing stress if...
...But there’s a high risk that this restructuring will not be thorough enough, leaving the country with a festering problem that will probably just lead to another default....
...Those paying back floating-rate debt are already feeling the pain of expensive debt servicing costs....
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