Bangkok--22 Dec--Standard & Poor's
The number of global weakest links continues to decline as the economy shows more signs of recovery, said an article published today by Standard & Poor's, titled "Global Bond Markets' Weakest Links And Monthly Default Rates (Premium)."
Weakest links are issuers rated 'B-' and lower with a negative outlook or ratings on CreditWatch negative.
"As of Nov. 15, 2009, there were 226 weakest links, which is down from the record high of 300 in April and 232 recorded one year ago," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "The current count is 25 less than the number recorded in October 2009, the biggest single-month drop since January 2004."
The 226 weakest links have combined rated debt worth $220.5 billion.
Through Dec. 15, 2009, 261 issuers defaulted, affecting debt worth $622.8 billion. By comparison, 126 defaults were recorded in all of 2008, affecting debt worth $433 billion.
Corporate default rates across regions have risen significantly in 2009, reaching levels not seen since prior recessions. The 12-month-trailing global corporate speculative-grade default rate increased to 9.77% in November 2009 from 9.73% in October and is now more than 12x the 25-year low of 0.79% recorded in November 2007. The U.S. speculative-grade corporate default rate increased to 11.28% in November from 11.21% in October and is now more than 11x the level at the end of 2007. The default rate in Europe also increased, to 8.37% from 7.46%, while the emerging markets default rate rose to 6.8% from 6.3%.
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 by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
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