"Sun Worldwide" – Corporate Debt Next Shoe To Drop.

PR Log (Press Release) – Jan 02, 2009 – Sun Worldwide are thought to be calling mounting defaults on corporate bonds the next great threat to the banking system.

A source close to Sun Worldwide cited recent news from UK banking giant HBOS that corporate delinquencies had contributed more than £3.3bn of total provisions of £5bn for bad loans. The Asian-based wealth manager is thought to expect the outlook to worsen in the quarters going forward as the economic environment continues to deteriorate.

Sun Worldwide reportedly advised clients that the credit card and unsecured lending markets would likely join mortgages and corporate debt as further burdens on the banking sector. They also reportedly repeated their advice to avoid premature investment in the stocks of banks until the 4th quarter of 2009.

The Sun Worldwide source suggested that although government efforts to stabilize financials were having an impact, further consolidation among banks could not be ruled out over the coming months.