Bangkok--27 Jan--Standard & Poor's
The number of global weakest links declined to 107 as of Jan. 20, 2011, from 111 in December 2010 and 226 a year ago, said an article published today by Standard & Poor's, titled "Global Bond Markets' Weakest Links And Monthly Default Rates Continue Their Descent."
Weakest links are issuers rated 'B-' and lower with a negative outlook or ratings on CreditWatch negative. The 107 weakest links combined have rated debt worth $112.69 billion.
In 2010, 82 issuers defaulted, affecting debt worth $97.48 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. Only one issuer has defaulted so far in 2011 (through Jan. 21)--Czech Republic-based SAZKA a.s.
"The 12-month-trailing global corporate speculative-grade default rate fell to 2.8% in December 2010 from 2.91% in November--its 11th consecutive monthly decline," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "The U.S. speculative-grade corporate default rate decreased for the 13th month in a row, to 3.27% in December from 3.35% in November." In Europe, the default rate fell to 1.03% in December from 1.07% in November, and the emerging markets default rate declined to 1.23% from 1.24%.
"Global new issuance among corporate speculative-grade-rated entities reached both annual and quarterly record highs in 2010," said Ms. Vazza. "New issuance totaled $355 billion in the full year and $110 billion in the fourth quarter." By comparison, $93 billion came to market in the third quarter of 2010, $60 billion in the second quarter, and $82 billion in the first.
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Media Contact:
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Analyst Contacts:
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