Bangkok--21 Dec--Standard & Poor's
As 2010 comes to a close, the economic recovery is now firmly progressing, albeit at a steady crawl, and credit market indicators in the U.S. appear to be slowly improving, as well, according to an article published today by Standard & Poor's, titled "U.S. Distressed Debt Monitor (Premium)."
"As a result, the U.S. speculative-grade corporate default rate has fallen to 3.35%--its lowest point in two years," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "The speculative-grade corporate bond spread, which stood at 539 basis points (bps) as of Dec. 15, is within reach of its 2010 low point of 537 bps seen on April 26. Along with this, the distress ratio has continued its descent, dropping to 6.5% as of Dec. 15 from 8.4% in November."
Standard & Poor's distress ratio is defined as the number of distressed securities divided by the total number of speculative-grade-rated issues. Distressed credits are speculative-grade-rated issues that have option-adjusted spreads of more than 1,000 bps relative to Treasuries.
Both the corporate and leveraged loan distress ratios fell in November. The S&P/LSTA Leveraged Loan Index distress ratio dropped to 7.7% at the end of November from 7.9% in the previous month.
Among distressed bonds, the total number of companies with issues trading with spreads of 1,000 bps and higher is currently 69. This is a drop-off from 85 seen in November. Within the distressed universe, recovery prospects are weak.
For subscribers who have access to the Global Credit Portal, click here for the article "U.S. Distressed Monitor." For subscribers who have access to premium Global Fixed Income Research content, find the article here "U.S. Distressed Debt Monitor (Premium)." For more information or data inquiries, please call Client Services at 1-877-772-5436.
The standard version of this article is part of our standard Global Fixed Income Research content. The premium version contains expanded analysis of the article's most significant points, typically broken out by sector and region. Also in the premium version are in-depth charts and tables, the underlying data of which are available for download. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760