Bangkok--29 Sep--Standard & Poor's
The number of global weakest links has increased slightly, to 123 as of Sept. 19 from 120 as of Aug. 17. The 123 weakest links have total rated debt worth $193.8 billion, said an article published today by Standard & Poor's Global Fixed Income Research, titled "Global Weakest Links And Default Rates: The Global Default Rate Continues To Decline Despite Deterioration Of Other Credit Measures."
Weakest links are issuers rated 'B-' and lower with either negative outlooks or ratings on CreditWatch negative.
So far, only 29 issuers have defaulted globally in 2011 (through Sept. 19), six of which have defaulted since the end of July. The defaulted issuers have combined outstanding debt worth $48.6 billion.
"The 12-month-trailing global corporate speculative-grade default rate decreased to 1.79% in August from 1.87% in July," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "Regionally, the U.S. corporate speculative-grade default rate declined marginally, to 2.09% from 2.10%, and the European default rate declined slightly, to 0.88% from 0.90%." The default rate in the emerging markets increased to 0.52% from 0.51%.
"The continued weakness in the U.S. and European economies has been a drag on the global recovery," said Ms. Vazza. Our economists expect global real GDP to grow 3.1% in 2011 and 3.5% in 2012. The growth is much lower than the 4.2% rate in 2010. In the U.S. and eurozone, we expect real GDP growth of 1.6% and 1.7%, respectively, in 2011 and 1.9% and 1.5% in 2012.
"In addition, after a strong first half of the year, global corporate speculative-grade issuance plummeted in August as investors became more wary of a slowing global economy," said Ms. Vazza. "Only 11 speculative-grade deals, worth $4.3 billion, came to market in the last month and a half." In Europe, there were no new speculative-grade deals that came to market in August and only two in September (through Sept. 19).
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