Bangkok--30 Jul--Standard & Poor's
NZF Money Ltd., a New Zealand-based finance company, was appointed a receiver at the request of its directors this week, and U.S.-based transportation company YRC Worldwide Inc. restructured its debt. These events raise the global corporate default tally to 21 so far in 2011, said an article published today by Standard & Poor's, titled "Global Corporate Default Update (July 21 - 27, 2011) (Premium)."
Of the total, 13 issuers were based in the U.S., three were based in New Zealand, two were based in Canada, and one each was based in the Czech Republic, France, and Russia. By comparison, 50 global corporate issuers had defaulted by this time in 2010. Of these defaulters, 35 were U.S.-based issuers, two were European issuers, six were from the emerging markets, and seven were in the other developed region (Australia, Canada, Japan, and New Zealand).
Eight of this year's defaults were due to missed interest or principal payments and seven were due to distressed exchanges--both among the top reasons for default in 2010. Of the remaining six, three issuers defaulted after they filed for bankruptcy, another had its banking license revoked by its country's central bank, the fifth was forced into liquidation as a result of regulatory action, and the sixth was appointed a receiver.
Of the defaults in 2010, 28 defaults 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.
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