Bangkok--14 Aug--Standard & Poor's Only one default—U.S.-based Wornick Co. (no longer rated)—was recorded among global corporates rated by Standard & Poor's Ratings Services in July, bringing the total to 12 defaults for 2007 year to date, according to an article published today by Standard & Poor's. The report, titled "Global Bond Markets' Weakest Links And Monthly Default Rates," said that defaults affected rated debt worth about US$2.4 billion. "Based on the number of default occurrences year to date, we have lowered our speculative-grade default forecast to 1.4% by year-end 2007," said Diane Vazza, head of Global Fixed Income Research. "This does not indicate that we expect corporate credit risks to diminish; rather it is an indication that corporate defaults will be slow to materialize in the remainder of this year. At the same time, there is a material risk that defaults may be more severe beyond the one-year forecast horizon." The 12-month trailing global corporate speculative-grade bond default rate declined further to 1.06% in July from 1.12% in June, remaining near record lows. The default rate has been below its long-term (1981-2006) average of 4.48% for 42 consecutive months. By region, the speculative-grade default rates in July 2007 hit another 25-year low of 1.21% in the U.S., 2.31% in Europe, and 0.19% in emerging markets. As of July 31, 2007, 89 weakest links globally—defined as issuers rated 'B-' or lower with either a negative outlook or ratings on CreditWatch with negative implications—were vulnerable to default on combined rated debt worth $50.6 billion, one more than the number recorded last month. Consumer products, media and entertainment, and retail/restaurants showed the highest concentrations of weakest-links issuers. Ms. Vazza added, "Market volatility shut down the issuance pipeline in July 2007 in the U.S. speculative-grade market, as issuers faced rising risk aversion and a market hesitant to absorb low-grade issuance. There were only four new speculative-grade issuances in July compared with an average of 38 new speculative-grade issuances per month in the first half of 2007." 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 Contact: Diane Vazza, New York (1) 212-438-2760