Bangkok--19 Jan--Standard & Poor's
Standard & Poor's Ratings Services' latest "Global Bond Markets' Weakest Links And Monthly Default Rates" article states that there were two defaults among rated global corporates since the last report, making a total of 29 corporate defaults in 2006, affecting rated debt worth US$7.13 billion.
The 12-month trailing global corporate speculative-grade bond default rate decreased to 1.09% in December from 1.19% in November. This has been below its long-term (1981-2006) average of 4.48% for 35 consecutive months. By region, speculative-grade default rates were recorded at 1.26% in the U.S., 2.07% in Europe, and 0.38% in the emerging markets.
"The proportion of high yield distressed issuers fell to an all-time low of 1.6% in December from 2.1% in November," noted Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Distress and defaults continue to be suppressed by abundant liquidity and generous financing provisions." The U.S. speculative-grade default rate ended 2006 at a near-record low. In 2007, our prediction remains that the default rate will edge up slowly from its 2006 trough, ending the year in the 2.5%-3.0% range (results are based on running the model on Jan. 11, 2007). The U.S. speculative-grade default rate is expected to remain below the long-term average (4.54%). Default rates among U.S. leveraged loans are also projected 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 . If 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] . The report is also available at www.sandp.com/gfir , listed 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