Bangkok--27 May--Standard & Poor's
The number of global weakest links held steady at 105 as of May 19, 2011, the same as the previous month, but a decrease from 108 in March 2011, said an article published today by Standard & Poor's, titled "Global Weakest Links And Default Rates: Weakest Links Are Unchanged And Default Rates Increase Slightly In April."
Weakest links are issuers rated 'B-' and lower with a negative outlook or ratings on CreditWatch negative. The 105 weakest links have total rated debt worth $140 billion.
"So far in 2011 (through May 19), 13 issuers have defaulted, with combined outstanding debt worth $36.6 billion," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. In 2010, 82 issuers defaulted on debt worth $97.48 billion. In 2009, 264 issuers defaulted, affecting debt worth $627.7 billion, and in 2008, 126 issuers defaulted, affecting debt worth $433 billion.
"The 12-month-trailing global corporate speculative-grade default rate increased to 2.28% in April from 2.07% in March," said Ms. Vazza. "Regionally, the U.S. speculative-grade corporate default rate increased modestly, to 2.55% in April from 2.47% in March."
In Europe, the default rate fell to 0.95% from 0.98%, and the emerging markets default rate increased to 1.2% from 1.05%.
"The U.S. has the most weakest links, with 71 of the 105 entities, or 67.6%," said Ms. Vazza. "By sector, media and entertainment; oil and gas exploration and production; chemicals, packaging, and environmental services; and consumer products had the highest concentrations of weakest links."
The 12-month-trailing default rate for U.S. leveraged loans (based on the number of loans) continued to decline to 1.50% in April from 1.62% in March, 2.05% in February, and 2.18% in January, according to Standard & Poor's Leveraged Commentary & Data.
The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
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Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760