Bangkok--3 Mar--Standard & Poor's Defaults remained suppressed in 2007, with only two rated issuers defaulting in Europe, lower than the four recorded in 2006 and a peak of 19 in 2002, according to an article published today by Standard & Poor's. The report, titled "2007 Annual European Corporate Default Study And Rating Transitions (Premium)," says that the two defaults recorded in 2007 affected rated debt worth US$457 (?311.4) million. "Notwithstanding heightened financial volatility beginning in the latter half of 2007, corporate defaults in Europe remained very low, maintaining the trend of the past four years," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The default count in 2007—including nonconfidentially and confidentially rated entities as well as those that were not rated at the time of default—dropped to its lowest level in two years." Expressed as a default rate, the European speculative-grade corporate default rate ended 2007 at 0.98%, lower than the 1.81% recorded in 2006, but higher than the 0.47% recorded in 2005. By contrast, speculative-grade default rates were 0.97% in the U.S. and 0.18% in the emerging markets at the end of 2007. In addition, Gini ratios attest that ratings continue to be effective indicators of relative default risk. Among European corporate entities rated by Standard & Poor's Ratings Services, the average one-year Gini coefficient was 92%; three-year, 86%; five-year, 82%; and seven-year, 79%. Ms. Vazza added, "Analysis of the transition rates over the four quarters ended December 2007 suggests that ratings behavior continues to exhibit consistency with long-term trends, showing a clear negative relationship 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