Bangkok--17 Jun--Standard & Poor's
The number of global weakest links continues to drop throughout 2010. Weakest links totaled 156 as of June 10, down from 161 in May and 290 a year ago, said an article published today by Standard & Poor's, titled "Global Bond Markets' Weakest Links And Monthly Default Rates (Premium)." The 156 weakest links have combined rated debt worth $166.81 billion.
Weakest links are issuers rated 'B-' and lower with a negative outlook or ratings on CreditWatch negative.
The U.S. leads in the number of weakest links, with 107 of the 156 entities, or 69%. By sector, media and entertainment; banks; consumer products; chemicals, packaging, and environmental services; and finance companies were the most vulnerable, with the highest concentrations of weakest links.
So far in 2010 (through June 10), 42 issuers have defaulted. Of these, 30 are from the U.S., three each are from Canada and New Zealand, and one each is from Argentina, Australia, Ireland, the Netherlands, Indonesia, and Bahrain.
"The 12-month-trailing global corporate speculative-grade default rate fell to 5.71% in May 2010 from 6.96% in April--its sixth consecutive monthly decline," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research.
"After a strong start to 2010, global new issuance among corporate speculative-grade-rated entities has slowed in the second quarter, with a total of just $49.2 billion in new issuance through June 10," said Ms. Vazza. "This compares with $79.5 billion in the first quarter."
In May 2010, 23 corporate speculative-grade deals came to the market, raising $7.9 billion, following 70 deals in April worth $40 billion. Recent market volatility appears to be dampening the momentum of new speculative-grade deals that are coming to market.
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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