Bangkok--14 Nov--Standard & Poor's
Four defaults were recorded in October, the single largest monthly count in 10 months, according to an article published today by Standard & Poor's Ratings Services. The article, which is titled "Global Bond Markets' Weakest Links And Monthly Default Rates," says that this brings the year-to-date total to 22 defaults, affecting rated debt worth US$6.3 billion.
The 12-month trailing global corporate speculative-grade bond default rate increased to 0.98% in October from a 24-year record low of 0.94% in September. This has been below its long-term (1981-2005) average of 4.61% for 33 consecutive months. By region, speculative-grade default rates were recorded at 1.27% in the U.S., 1.08% in Europe, and 0.20% in the emerging markets.
"We expect the U.S. speculative-grade default rate to end 2006 at a near-record low of 1.4%," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "In 2007, our prediction remains that the default rate will edge up slowly from its 2006 trough, reaching 2.4% by mid-year and 3.2% by year-end 2007." (Results are based on running the model on Nov. 8, 2006.) The U.S. speculative-grade default rate is expected to remain below the long-term average (4.7%). Looking ahead, default rates among U.S. leveraged loans are also expected to increase.
The report is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com.f you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-9823 or sending an e-mail to [email protected] report is also available at www.sandp.com/gfir,isted under Global Fixed Income Research. If you have not previously registered with the site, you will need to do so to access this material. Registration requires minimal information and is free. Members of the media may request a copy of this report by contacting the media representative name provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 7,500 employees, including wholly owned affiliates, located in 21 countries. Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com .
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