Over the past sixteen years, RapidRatings has examined public and private company defaults through the lens of the FHR®. In our 2024 Annual Default Review, we explore trends from companies that defaulted in 2023 and examine the effectiveness of the FHR® in predicting these defaults.

Key Findings:

95% of defaulters had an FHR® of below 40 putting them in the very high risk/high risk category.

Companies that defaulted in 2023 started the year with average debt levels double that of US Coverage in 2022, while the average rate of interest was also twice as high in 2023 from 2022.

Risk managers using RapidRatings had 36 months line of sight on deteriorating suppliers and vendors. The average FHR at default was 25. Twelve months prior to default: 32. Thirty-six months prior: 36.

What can the Annual Default Review reveal about your risk exposure?