Bangkok--4 Apr--Standard & Poor's
The global corporate default tally remains unchanged this week at three so far in 2011--the sixth consecutive week without a global corporate default, said an article published today by Standard & Poor's, titled "Global Corporate Default Update (March 25 - 31, 2011) (Premium)." This is the longest span without a corporate default since the seven weeks between Payless Cashways Inc.'s default in June 1997 and Levitz Furniture Corp.'s default in September 1997.
Two of this year's defaults were based in the U.S., and one was based in the Czech Republic. By comparison, 29 global corporate issuers had defaulted by this time in 2010 (20 U.S.-based issuers, one European issuer, two issuers from the emerging markets, and six in the other developed region, which consists of Australia, Canada, Japan, and New Zealand).
All three of this year's defaulters missed interest or principal payments, which was one of the top reasons for default last year. Of the defaults in 2010, 28 defaults resulted from missed interest or principal payments, 25 defaults resulted from Chapter 11 and foreign bankruptcy filings, 23 from distressed exchanges, three from receiverships, one from regulatory directives, and one from administration.
"Following a year of record-setting highs in terms of global corporate default statistics, 2010 provided the markets with a noticeable reversal," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "In 2010, 81 global corporate issuers defaulted, down from the record high of 265 in 2009."
None of the 81 defaulters began the year rated investment grade. The debt amount affected by these defaults fell to $95.7 billion, also considerably lower than in 2009.
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. 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.
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