Bangkok--5 Nov--Standard & Poor's
Despite the lingering effects of the recent financial downturn, the number of defaults in the U.S. moderated in October, said an article published today by Standard & Poor's. Nevertheless, relevant credit metrics in the U.S. show continued deterioration of credit quality alongside a prolonged contraction of new issuance and tightening credit conditions.
The number of corporate defaults in 2008 continued to rise as expected, with four U.S. defaults in October, bringing the year-to-date total to 65, according to the article, titled "U.S. Credit Metrics Monthly: Default Rate Increases Marginally In October." After the fall of three large financial institutions in September, all of the defaults in October hail from various nonfinancial sectors.
The preliminary estimate for the U.S. 12-month-trailing speculative-grade default rate in October is 2.9% (subject to revision), roughly in line with 2.7% in September and higher than the 0.97% reported in December 2007.
"We expect the speculative-grade default rate to escalate to a mean forecast of 7.6% by September 2009, but it could reach as high as 9.6% if economic conditions are worse than expected," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group.
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Media Contact:
David Wargin, New York (1) 212-438-1579, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760