Bangkok--22 Nov--Standard & Poor's
Throughout 2010, the number of global weakest links has continued to drop, noted an article published November 18, 2010 by Standard & Poor's, titled "Global Bond Markets' Weakest Links And Monthly Default Rates (Premium)." Weakest links totaled 110 as of Nov. 11, down from 118 in September and 251 a year ago. The 110 weakest links combined have rated debt worth $133.291 billion.
Weakest links are issuers rated 'B-' and lower with a negative outlook or ratings on CreditWatch negative.
So far in 2010 (through Nov. 11), 74 issuers have defaulted, affecting debt worth $93.02 billion. In contrast, in 2009, 264 issuers defaulted, affecting debt worth $627.7 billion, and in 2008, 126 defaults were recorded, affecting debt worth $433 billion. Of the 74 defaults in 2010, 52 are from the U.S., five are from New Zealand, four are from Canada, two each are from Russia, Mexico, and Argentina, and one each is from Japan, Australia, Ireland, the Netherlands, Indonesia, Hong Kong, and Bahrain.
"The 12-month trailing global corporate speculative-grade default rate fell to 3.11% in October 2010 from 3.4% in September--its 11th consecutive monthly decline," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "Regionally, the U.S. speculative-grade corporate default rate also decreased for the 11th month in a row to 3.37% in October from 3.96% in September." In Europe, the default rate rose to 3.19% from the 2.72% seen since August, and the emerging markets default rate increased slightly, rising to 1.77% from 1.6%.
"Global new issuance among corporate speculative-grade-rated entities started out strong in early 2010 but slowed in May and June, largely because of sovereign debt concerns in Europe," noted Ms. Vazza. "In recent months, global new issuance has picked up again."
In addition, the U.S. speculative-grade spread narrowed to 572.34 basis points as of Nov. 9, 2010, from 600 basis points at the end of October.
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Media Contact:
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Analyst Contact:
Diane Vazza, New York (1) 212-438-2760