Bonds

European ‘zombie’ companies have three to six months' runway before defaults rise, says Aviva Investors

European ‘zombie’ companies have three to six months' runway before defaults rise, says Aviva Investors

Concern is growing over a likely spike in defaults among so-called ‘zombie’ companies that have stayed afloat during the coronavirus pandemic by relying on government stimulus and increasing their debt loads, but will struggle to keep servicing loans as government schemes roll back.