Bangkok--18 Apr--Standard & Poor's
U.S.-based Liz Claiborne Inc. and Canada-based Cinram International Inc. completed distressed exchange offers this week, raising the 2011 global corporate default tally to six, said an article published today by Standard & Poor's, titled "Global Corporate Default Update (April 8 - 14, 2011) (Premium)."
Four of this year's defaults were based in the U.S., one was based in the Czech Republic, and one was based in Canada. By comparison, 30 global corporate issuers had defaulted by this time in 2010 (21 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).
"So far in 2011, two entities have defaulted because of distressed exchange offers, and another four defaulted because of missed interest or principal payments, which were among the top reasons for default last year," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research.
Of the defaults in 2010, 28 resulted from missed interest or principal payments, 25 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. 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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