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Debt defaults hit $50 billion in 2016, oil and gas hardest hit

Defaults on corporate loans have reached $50 billion since the start of 2016, with the number of companies missing payments on debt rising at the fastest rate since 2009, according to a report from Standard & Poor's. 18 Apr 2016

Historically, the financial institutions sector has seen the highest number of defaults, but the oil and gas sector is taking the lead this year. Half of the 2016 defaults have come from the oil and gas industry, followed by the metals, mining and steel sector the report said.

Oil and gas expert Bob Ruddiman of Pinsent Masons, the law firm behind Out-Law.com said: "This is reflective of the extremely difficult conditions that oil and gas companies and the associated supply chain are experiencing."

Standard and Poor's maintains a list of companies who are at risk of default, and this reached 242 businesses by the end of March, the highest level since 251 "weakest links" were seen in November 2009 the report said.

There have been 46 defaults since the start of the year, with five in the past week including the first European default of the year by paper manufacturer Norske Skogindustrier, Standard & Poor's said.

To date, 37 of the defaulters are from the US, seven from emerging markets and one each from Europe, Australia, Canada, Japan and New Zealand.

At this point last year there had been 31 defaults, with 18 in the US, seven in emerging markets, four in Europe, and two in the other developed countries. Standard & Poor's said.