Bangkok--20 Feb--Standard & Poor's As of Feb. 8, 2008, 102 weakest links globally were vulnerable to default on combined rated debt worth $42.1 billion, according to an article published Friday by Standard & Poor's. The report, titled "Global Bond Markets' Weakest Links And Monthly Default Rates (Premium)," says that the consumer products, retail/restaurants, and media and entertainment sectors continued to show the highest concentration of weakest links; these sectors have topped the list for eight consecutive months. "We expect the U.S. speculative-grade default rate to accelerate substantially from near its 25-year low of 1.09% in January, reaching 4.6% in the next 12 months," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The increase in defaults reflects the cumulative impact of the changes in the credit-pricing environment, earnings deceleration, and growing recessionary pressure in the economy." The 12-month trailing global corporate speculative-grade bond default rate increased modestly to 0.98% in January 2008 from 0.86% recorded a month ago. The default rate has stayed below its long-term (1981-2007) average of 4.35% for 48 consecutive months. By region, the speculative-grade default rate was recorded at 1.09% in the U.S., 0.95% in Europe, and 0.18% in the emerging markets. Moreover, the rising volatility in the credit markets and the escalating risk of recession contribute to substantial variability in the default forecast. In addition to the baseline, we estimate that the U.S. speculative-grade default rate could increase to a high of 5.7% in a pessimistic scenario, or to 3.4% in an optimistic scenario. Ms. Vazza added, "Six defaults, three more than 12 months ago, were recorded worldwide in January 2008, affecting debt worth $6.3 billion. At 22, the default count in 2007 was the lowest in 11 years, affecting debt worth $8.1 billion. All but one defaulter in January received an original rating that was speculative grade. Of the total, five are U.S.-based issuers and one is based in Canada. The U.S. monthly default tally of five in January is the highest in 28 months." 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