Bangkok--2 Nov--Standard & Poor's As of Oct. 15, 2007, 96 (two fewer than recorded last month) weakest links globally were vulnerable to default on combined rated debt worth $57.4 billion, according to an article published by Standard & Poor's on Oct. 26, 2007. The report, titled "Global Bond Markets' Weakest Links And Monthly Default Rates," stated that the consumer products, media and entertainment, and retail/restaurants sectors continued to show the highest concentration of weakest links. "Although financial market uncertainty continues, we expect that the U.S. speculative-grade default rate will remain suppressed at 1.4% by year-end 2007," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "If the pace of defaults in the past two months is maintained in the fourth quarter, there is a high likelihood that the default rate will be lower than our estimate. The muted 2007 year-end projection does not indicate that we expect corporate credit risk to diminish. Instead, it signifies that corporate defaults—though slow to materialize—are on the upward leg of an ascent that will gain momentum in the second half of 2008 and will likely continue into 2009." The high-yield issuance market resumed activity in September with 10 new issues. Activity remains sluggish compared with the average speculative-grade monthly new issuance of 38 in the first half of 2007, but an improvement compared with the measly four new issues in July and none in August. In the trailing six months, issuance of deals rated 'B-' or lower to total speculative grade increased to 52.5% in September from 49% in August. On a quarterly basis, the ratio was 42.9% at the end of third quarter, 53.6% at the end of the second quarter, and 42.7% at the first quarter. This ratio has been elevated for 17 quarters, with an annual ratio of 42.5% for 2006, 44% for 2005, 46.4% for 2004, and 30% for 2003. Ms. Vazza added, "Only one default was recorded among global corporates rated by Standard & Poor's in September, bringing the total to 15 defaults through the third quarter of 2007. These defaults affected rated debt worth $4.5 billion." 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.