"An analysis of 154 companies that have defaulted more than once suggests that some could do so again if the debt crisis in Europe, slow economic recovery in the US or concerns about China's growth weaken credit conditions," says Senior Vice President and author of the report David Keisman. Those companies are among the more than 1,000 listed in Moody's Ultimate Recovery Database, which captures a default when a company emerges from it, and dates back to 1988.

Overall, a "Chapter 22," or two consecutive Chapter 11 bankruptcy filings, is the most common type of re-default, Keisman says. This occurred in about two thirds of cases, with Filene's Basement Corp., Trans World Airlines and Trump Entertainment Resorts Holdings among them. About one quarter of the companies in the database that had more than one default had a distressed exchange followed by a bankruptcy.

But during the Great Recession the latter scenario was the most common. "If those distressed exchanges were preemptive efforts to control the default process and maximize owners' equity, they did not work," Keisman says. "And a surge of distressed exchanges in 2009, during the depths of the crisis, suggests there may be more to come." The average length of time between an initial and subsequent default for companies in the database is four years, Keisman says, so some of the 2009 defaulters could be due to come under pressure again next year if credit conditions deteriorate.

Unsurprisingly, re-defaults more often lead to liquidation, with about 40% of companies whose re-default was a bankruptcy filing ultimately being broken up. Nevertheless, at 45%, family-level recoveries for re-defaulting companies are close to the average of 54% for the broader database despite the higher number of liquidations among them.

Moody's research subscribers can access this report at http://www.moodys.com/research/US-Corporate-Default-and-Recoveries-Lessons-from-25-Years-of--PBC_147863.

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David Keisman Senior Vice President Infrastructure Finance Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Tom Marshella MD-US and Amer Corporate Fin Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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