Bangkok--21 Nov--Standard & Poor’s Four companies (three publicly and one confidentially rated) defaulted in the third quarter of 2007, less than both the five defaults in the second quarter and the 5.4 average quarterly defaults since the beginning of 2006, according to an article published today by Standard & Poor's. The report, titled "Quarterly Default Update And Rating Transitions (Premium)," says the volume of rated debt affected by last quarter's defaults was $2.3 billion, less than the $3.2 billion in the second quarter, and still well below the most recent peak of $25.1 billion recorded in the fourth quarter of 2005. "Globally, the corporate default rate for speculative-grade and investment-grade rated entities fell to 0.16% at the end of the second quarter from 0.22% in the same period of 2006," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "In the U.S., based on the number of defaults to date, we have maintained our speculative-grade default forecast of 1.4% by year-end 2007. 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 closer to an all-time low of 1.0%. 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." After an extended period of stability, ratings appear poised for vulnerability in light of the ongoing volatility in the credit markets. In the third quarter, the downgrade/upgrade ratio rose to 1.14% after 12 quarters at or below 1.00% (which indicates that downgrades equal upgrades). Much of the increase in the downgrade/upgrade ratio stemmed from a sharp drop-off in upgrades relative to prior quarters. Ms Vazza added, "Analysis of the transition rates over the four quarters ended Sept. 30, 2007, suggests that ratings behavior continues to be consistent with long-term trends, showing a clear negative correspondence between credit quality and default probability." The report is available to RatingsDirect subscribers who have upgraded their package to include the Global Fixed Income Research add-on. RatingsDirect is 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 with the Global Fixed Income Research add-on, please contact your local Standard & Poor's representative or [email protected] for further information. 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 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 8,500 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. Key Contacts: Americas Media Relations: (1) 212-438-6667 media_ [email protected] Americas Customer Service: (1) 212-438-7280 [email protected]