Bangkok--16 Jun--Standard & Poor's
Eight global corporate issuers defaulted this week, bringing the 2009 year-to-date tally to 153 issuers--more than 4x the 35 defaults at this time in 2008, said an article published today by Standard & Poor's Ratings Services.
Seven of this week's defaulters were based in the U.S., and one was based in Brazil. By region, the default tallies now stand at 109 issuers in the U.S., seven issuers in Europe, 28 issuers in the emerging markets, and nine issuers in the other developed region (Australia, Canada, Japan, and New Zealand), according to the article, titled "Global Corporate Default Update (June 5 - June 11, 2009) (Premium)."
Two of this week's defaulters were a result of Chapter 11 filings, three were due to distressed exchanges, and three were confidential defaults. So far this year, 57 defaults were due to missed payments, 41 were due to bankruptcy-related filings, 40 were due to distressed exchanges, and 15 were due to other reasons.
"The number of distressed exchanges has been surging this year, with 40 issuer ratings revised to 'SD' (selective default) as a result of distressed exchanges, compared with 15 issuers in all of 2008 and four issuers in 2007," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. For more information, see "Global Credit Comment: Bondholders Get Buzzed (Premium)," published May 1, 2009, on RatingsDirect.
Of the global corporate defaulters so far this year, 43% of issues with available recovery ratings had recovery ratings of '6' (indicating our expectation for negligible recovery of 0%-10%), 14% of issues had recovery ratings of '5' (modest recovery prospects of 10%-30%), 11% had recovery ratings of '4' (average recovery prospects of 30%-50%), and 10% had recovery ratings of '3' (meaningful recovery prospects of 50%-70%). And for the remaining two rating categories, 13% of issues had recovery ratings of '2' (substantial recovery prospects of 70%-90%), and 9% 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.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760