Bangkok--18 May--Standard & Poor's
Nine global corporate issuers defaulted this week, bringing the 2009 year-to-date tally to 117 issuers--nearly 4x the default count at this time in 2008, said an article published today by Standard & Poor's.
Five of this week's defaulted issuers were based in the U.S. and four were based in the emerging markets, according to the article, titled "Global Corporate Default Update (May 8 - 14, 2009) (Premium)." This brings the corporate default tallies by region to 81 issuers in the U.S., seven issuers in Europe, 21 issuers in the emerging markets, and eight issuers in the other developed region (Australia, Canada, Japan, and New Zealand).
"Distressed exchanges were the leading reason for defaults this week, accounting for four defaulted issuers, followed by missed payments with three issuers and Chapter 11 filings with two issuers," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "The number of distressed exchanges has been surging this year, with 33 issuer ratings revised to 'SD' as a result of distressed exchanges, compared with 15 issuers in all of 2008 and four issuers in 2007."
Of the global corporate defaulters so far this year, 44% of issues with available recovery ratings had recovery ratings of '6' (indicating our expectation for negligible recovery of 0%-10%), 15% of issues had recovery ratings of '5' (modest recovery prospects of 10%-30%), 10% had recovery ratings of '4' (average recovery prospects of 30%-50%), and 12% had recovery ratings of '3' (meaningful recovery prospects of 50%-70%). And for the remaining two rating categories, 11% of issues had recovery ratings of '2' (substantial recovery prospects of 70%-90%) and 8% of issues had recovery ratings of '1' (very high recovery prospects of 90%-100%).
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect, at www.ratingsdirect.com. 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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