Bangkok--28 Jan--Standard & Poor's
Through Jan. 22, 2009, 15 companies defaulted, affecting debt worth $40 billion, said an article published today by Standard & Poor's. This continues the trend in 2008 when 126 companies defaulted, affecting debt worth $432 billion.
The continued increase in defaults is in sharp contrast with trends in prior years, according to the article, titled "Global Bond Markets' Weakest Links And Monthly Default Rates (Premium)." Only 22 issuers defaulted in all of 2007 and 30 defaulted in 2006.
Defaults continue to increase rapidly, particularly in the U.S. "The 12-month-trailing global corporate speculative-grade bond default rate increased to 3.43% in December 2008 from 2.67% in November and 2.33% in October," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. However, it has remained below its long-term (1981-2008) average of 4.26% for 58 consecutive months.
"The number of global weakest links continues to increase sharply as eroding credit quality leads to lower ratings and more entities with negative outlooks or ratings on CreditWatch with negative implications," said Ms. Vazza. (Weakest links are issuers rated 'B-' or lower with either a negative outlook or with ratings on CreditWatch with negative implications.) As of Jan. 21, 2009, weakest links increased for the 11th consecutive month to 232, with combined rated debt worth $397.02 billion.
RatingsDirect is the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. The standard version of this article is part of our standard Global Fixed Income Research content. The premium version contains expanded analysis of the article's most significant points, typically broken out by sector and region. Also in the premium version are in-depth charts and tables, the underlying data of which are available for download. Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com; under Ratings in the left navigation bar, select Find a Rating. Members of the media may request a copy of this report by contacting the media representative provided.
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Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760
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