Bangkok--4 Sep--Standard & Poor's
As a result of the prolonged U.S. recession, the speculative-grade default rate in the U.S. has reached double digits, coming in at an estimated 10.2% in August, said an article published today by Standard & Poor's.
The number of corporate defaults in 2009 continued the expansion seen at the end of 2008, with 18 more U.S. defaults in August, bringing the year-to-date total to 147, according to the article, titled "U.S. Credit Metrics Monthly: Default Rate Breaches 10% In August (Premium)."
"The preliminary estimate for the U.S. 12-month-trailing speculative-grade default rate in August is 10.2%, which is subject to revision," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "This is up from the 9.37% in July and much higher than the 2.5% reported in August 2008."
We expect the speculative-grade default rate to escalate to a mean forecast of 13.9% by July 2010, but it could reach as high as 18% if economic conditions are worse than expected.
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