Sovereign default risks are on course to rise further in 2021, with Iraq, Sri Lanka, Angola and Gabon at high probability of default, say Goldman Sachs analysts, Reuters reported. Five sovereign debt defaults or distressed debt exchanges - in which investors swap their debt for new bonds, often with longer maturities and a reduced value - have already happened in 2020 in the aftermath of the COVID-19 crisis, the most in around two decades. Although most of the emerging market high-yield sovereigns examined still came in below the probability levels previously associated with defaults, recent defaulters Ecuador, Argentina and Lebanon were among those with high probabilities of distress, the analysts said in a report. It defined distress as ranging from default to distressed debt exchanges. Read more
