Bangkok--12 Jan--Standard & Poor's
NEW YORK Jan. 11, 2010--The number of global weakest links remains high, though it has dropped markedly from record levels reached in the first half of 2009, said an article published Friday, January 8, 2010 by Standard & Poor's.
In general, credit quality is still vulnerable to market and economic risk, as reflected in low ratings and many entities with negative outlooks or ratings on CreditWatch negative, according to the article, titled "Global Credit Comment: The Number Of Weakest Links Is Declining But Remains High (Premium)."
As of Dec. 31, 2009, 225 global corporate issuers were weakest links. "The 225 weakest links have combined rated debt worth $214 billion. By contrast, there were 248 weakest links at the beginning of 2009 with $422 billion in total debt outstanding," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Of these 248 weakest links, 100 entities defaulted throughout 2009 and 77 remained weakest links as of Dec. 31, 2009." Weakest links peaked in March 2009 at 300 entities with more than $500 billion in outstanding debt.
We believe that low demand is hampering the top-line growth of many companies, even though access to credit has shown some recent improvements. The number of downgrades, including defaults, slowed in the fourth quarter of 2009 but many entities remain at the lower end of the ratings spectrum. The elevated number of weakest links likely will result in more defaults, even as we expect credit conditions to continue improving.
This article is part of our premium Global Fixed Income Research content, which is available to premium subscribers to RatingsDirect on the Global Credit Portal at www.globalcreditportal.com and to RatingsDirect at www.ratingsdirect.com. 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.
Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_
[email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]