Bangkok--21 Sep--Standard & Poor's
The number of global weakest links continues to drop throughout 2010. Weakest links totaled 128 as of Sept. 14, down from 133 in August and 278 a year ago, said an article published today by Standard & Poor's, titled "Global Bond Markets' Weakest Links And Monthly Default Rates."
Weakest links are issuers rated 'B-' and lower with a negative outlook or ratings on CreditWatch negative. The 128 weakest links have combined rated debt worth $146.31 billion.
So far in 2010 (through Sept. 14), 63 issuers have defaulted, affecting debt worth $71.4 billion. In 2009, 264 issuers defaulted, affecting debt worth $627.7 billion, and in 2008, 126 defaults were recorded, affecting debt worth $433 billion.
"The 12-month-trailing global corporate speculative-grade default rate fell to 3.65% in August 2010 from 4.51% in July--its ninth consecutive monthly decline," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "Regionally, the U.S. speculative-grade corporate default rate also decreased for the ninth consecutive time, to 4.31% in August from 5.48% in July." In Europe, the default rate declined to 2.7% from 3.76%, while the emerging markets default rate fell to 1.59% from 1.93%.
"Global new issuance among corporate speculative-grade-rated entities started out strong in early 2010, slowed in May and June largely because of sovereign debt concerns in Europe, and picked up again in recent months," said Ms. Vazza. "So far in the third quarter, $58.35 billion in speculative-grade debt has been issued, following a total of $59.6 billion in new issuance that came to market in the second quarter of 2010 and $79.5 billion in the first quarter."
In addition, the U.S. speculative-grade spread compressed slightly to 646 bps as of Sept. 14, 2010, from 679 bps at the end of August.
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Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760