A first estimate of European companies’ ability to cope with their debt loads has shown that the number to default on riskier loans will quadruple by next June.

The number of defaults on European leveraged loans will rise from 10 over the past year to 38 by June 2009, according to Standard & Poor’s. This is equivalent to a rise in the rate of default from 1.55 per cent to 5.8 per cent.