NEW YORK Fitch said Friday that it expects defaults on high-yield bonds to rise for the rest of the year and remain at above-average levels in 2001.
It blamed the tightening credit environment and rising costs that are putting pressure on companies that need to find refinancing.
The ratings agency said several large bankruptcies in November would likely push the yearend default rate to 5%, which would be the highest rate since 1991. It was 4.3% in 1999.
Through the first 10 months, 83 companies defaulted on $21.1 billion of high-yield debt, a 3.9% default rate, the ratings agency said.
Ten companies were responsible for half the amount defaulted.
Fitch said industries with double-digit default rates included transportation and food, beverage, and tobacco. Those with no default rate included utilities and cable. Fitch also said that 54% of the defaults so far this year were for bonds that were underwritten in 1997 and 1998, a time of easier credit.