Bangkok--23 Feb--Standard & Poor's,
Corporate defaults continue to rise rapidly in 2009. Through Feb. 17, 2009, 31 defaults, affecting debt worth $49 billion, have been recorded, said an article published today by Standard & Poor's.
This number is one-fourth of the 125 defaults recorded in all of 2008 (affecting debt worth $429 billion), according to the article, titled "Global Bond Markets' Weakest Links And Monthly Default Rates (Premium)."
"The continued rise in defaults is in sharp contrast with trends in prior years, when only 22 defaults were recorded in all of 2007 and 30 in 2006," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group.
Of the 31 defaults in 2009, 23 are from the U.S., five are from emerging markets, two are from Canada, and one is from France. The U.S. also leads in the number of weakest links, with 205 of the 265 entities, or 77%. (Weakest links are defined as issuers rated 'B-' or lower with either a negative outlook or with ratings on CreditWatch with negative implications, and they are at greater risk of default.)
"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 with ratings on CreditWatch negative," said Ms. Vazza. As of Feb. 16, 2009, weakest links increased for the 12th consecutive month to 265, with combined rated debt worth $485.74 billion.
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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