กรุงเทพฯ--23 ก.ค.--Standard & Poor's,
Through July 14, 2008, 42 companies have defaulted, affecting debt worth $33.6 billion, said an article published yesterday by Standard & Poor's. The article, which is titled "Global Bond Markets' Weakest Links And Monthly Default Rates (Premium)," said this already surpassed the 22 defaults recorded in all of 2007 and 30 defaults in 2006. Of the 41 defaults, 40 are domiciled in the U.S., and one is from Canada. The U.S. also leads in the number of weakest links—entities that are closest to the default threshold—with 118 (81%) of the 145 entities.
"Through the first half of 2008, defaults have increased significantly in the U.S. but remain scarce elsewhere," noted Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. The 12-month trailing global corporate speculative-grade bond default rate declined marginally to 1.44% in June from 1.45% in May, remaining below its long-term (1981-2007) average of 4.35% for 53 consecutive months. The U.S. speculative-grade default rate continued to increase, reaching 1.92% in June from 1.89% in May and a 25-year low of 0.97% at the end of 2007. The Europe default rate declined to zero, as there have been no publicly rated defaults in the last 12 months. The emerging markets default rate held steady at 0.17% for the fourth consecutive month.
"Our most recent mean baseline U.S. speculative-grade default rate forecast is 4.7%, a sharp increase from a 25-year low of 0.97% recorded at the end of 2007," Ms. Vazza added. "We also simulate the default-rate impact under two alternative economic scenarios, with one worse than the baseline and one better, both of which have an estimated 20% chance of occurring." The pessimistic scenario yields a mean 12-month default rate of 8.5%, nearly double the long-term average of 4.4% but still below the peak in 2001-2002. The optimistic scenario yields an average default rate of 3.7%, below the long-term average. We are in the process of revisiting our default forecasts and expect to release a report on it in the coming weeks.
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Mimi Barker, New York (1) 212-438-5054, mimi_barker@standardandpoors.com
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Diane Vazza, New York (1) 212-438-2760
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