Bangkok--4 Nov--Standard & Poor's
Despite more positive economic news that has emerged recently, the speculative-grade default rate in the U.S. increased to an estimated 11.33% in October, said an article published today by Standard & Poor's.
"Corporate defaults maintained their pace in the U.S. in October, totaling 11 during the month," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "This brings the year-to-date total to 175. The defaults in October are attributable to five nonfinancial sectors and one financial sector."
The preliminary estimate for the U.S. 12-month-trailing speculative-grade default rate in October is 11.33% (subject to revision), up from 10.8% in September, according to the article, titled "U.S. Credit Metrics Monthly: Default Rate Rises To An Estimated 11.3% In October (Premium)."
After reaching unprecedented highs at the end of 2008, U.S. corporate bond spreads have been on a steady decline through 2009 and are now much lower than their levels at this time in 2008. Another bright spot for credit markets is the increase in new issuance.
Nevertheless, consistent with difficult economic and financial conditions in the U.S., the number of upgrades in 2009 is lower than it was in 2008--currently at 125, compared with 166 a year ago. Downgrades are up significantly this year, at 739 through Oct. 30, 2009, versus 497 at the same time in 2008.
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.
Media Contact:
Mimi Barker, New York (1) 212-438-5054, [email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760