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Corporate default risk eases; experts question whether ‘reckoning’ lies ahead

May 7, 2021 Article 4 min read

Over the past year, government stimulus has saved many companies from default during the COVID-19 pandemic. But as the economy recovers and government aid wanes, some companies won’t survive. Tim Weed discusses the challenges that lie ahead via S&P Global.

View of an empty office space/corporate work environment.The potential for U.S. defaults remains low as companies take advantage of government stimulus and the economy continues to recover from the coronavirus crisis.

But as the economy recovers, more defaults could be on the horizon whenever the benefits of government aid wane and lenders become less lenient, experts said.

"There's going to be a day of reckoning," said Tim Weed, a partner at the professional services firm Plante Moran, in an interview.

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