Bangkok--27 Jun--Standard & Poor's
The number of global weakest links increased to 107 as of June 21 from 105 the previous two months, said an article published today by Standard & Poor's Global Fixed Income Research, titled "Global Weakest Links And Default Rates: Corporate Default Rates Decline Further In May."
Weakest links are issuers rated 'B-' and lower with a negative outlook or ratings on CreditWatch negative. The 107 weakest links have total rated debt worth $186 billion.
"So far in 2011, through June 21, only 15 issuers have defaulted, with combined outstanding debt worth $39.18 billion," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "The 12-month-trailing global corporate speculative-grade default rate decreased to 2.18% in May from 2.28% in April."
Regionally, the U.S. speculative-grade corporate default rate declined to 2.53% from 2.55%. In Europe, the default rate fell to 0.93% from 0.95%, and the emerging markets default rate decreased to 1.03% from 1.2%.
Global corporate speculative-grade issuance remains strong in 2011, totaling $221.34 billion through June 21. New issuance reached a record-high $345 billion in 2010, following $203 billion in 2009 and only $56 billion in 2008.
"The U.S. has the most weakest links, with 71 of the 107 entities, or 66.4%," said Ms. Vazza. "By sector, media and entertainment, banks, and utilities have the highest concentrations of weakest links."
The 12-month-trailing default rate for U.S. leveraged loans (based on the number of loans) held steady at 1.5% in May from April. The measure was 1.62% in March, 2.05% in February, and 2.18% in January, according to Standard & Poor's Leveraged Commentary & Data.
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Media Contacts:
John Piecuch, New York (1) 212-438-1579,
[email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760