Tuesday 16 February 2021 5:48 pm

UK companies 'more distressed' than European rivals, Moody's finds

UK has the highest number of distressed companies in Europe, according to data from Moody’s.

The number of distressed companies in the EMEA region remains close to record highs, with the UK surpassing any other country, as the coronavirus fallout continues to weigh on economic recovery.

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Distressed companies, defined by Moody’s as companies with a B3 negative rating or lower, fell to 113 in December which was only slightly lower than the all-time high of 130 in June last year.

The UK had the highest number of distressed companies, with 28 bearing a B3 negative rating or lower, while Germany showed the most volatility.

The manufacturing industry was the most well-represented sector on Moody’s list as the sector has struggled to accommodate to social distancing restrictions brought on by the pandemic.

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Even though the number of companies on the list remains high, downgrades and negative outlooks fell dramatically towards the tail end of 2020 as companies have begun to adjust to the effects of COVID-19.

Kristin Yeatman, vice president and  senior analyst at Moody’s Investors Service, said: “We expect the number of companies rated B3 and lower to remain broadly stable over the first six months of 2021 as defaults, upgrades, and withdrawals are set to outnumber downgrades at those levels.”

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