Bangkok--14 May--Standard & Poor's
Two defaults-U.S.-based Bally Total Fitness and Remy International Inc.-were recorded among global corporates rated by Standard & Poor's Ratings Services in April, bringing the year-to-date total to eight according to an article published today by Standard & Poors. These affected rated debt worth US$1.8 billion. The report, titled, "Global Bond Markets' Weakest Links And Monthly Default Rates," stated the 12-month trailing global corporate speculative-grade bond default rate increased to 1.25% in April from 1.17% in March.
"As of May 8, 2007, 101 weakest links were vulnerable to default on combined rated debt worth $70.9 billion, 10 fewer than the number recorded last month," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Consumer products, media and entertainment, and retail/restaurants showed the highest concentration of weakest-links issuers."
The proportion of high-yield distressed issuers was unchanged in April, remaining at the record low of 0.8%. Distress and defaults continue to be suppressed by abundant liquidity and generous financing provisions. We forecast that the U.S. speculative-grade default rate will continue increasing throughout the year, reaching 2.3% by year-end 2007 and 2.5% by the first quarter of 2008 (results are based on running the model on May 9, 2007).
Ms. Vazza added "by number of issuers, the pipeline of U.S. low-rated bond issuance among deals rated 'B-' or lower to total speculative grade in the trailing-six months increased to 48.7% in April from 44.4% in March."
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] . Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com ; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
Mimi Barker, New York (1) 212-438-5054
[email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760