S&P: Global junk default rate hits 1.08%, two-decade low for 12 months ended April 30

By Caroline Salls

Pittsburgh, May 11 - The global corporate speculative-grade bond default rate fell to its lowest level in more than two decades, reaching 1.08% for the 12 months ended in April from 1.28% in March, according to a Standard & Poor's report.

Speculative-grade default rates were recorded at 1.66% in the United States, zero in Europe and 0.21% in the emerging markets.

In the first four months of 2006, seven defaults have been recorded among entities rated by S&P, affecting $4.3 billion of rated debt.

Globally, S&P said the speculative-grade default rate has remained below the long-term 1981 to 2005 average of 4.66% for 27 consecutive months.

"The global default rate is expected to edge up slowly from its trough in 2006, but the near-term default outlook is mostly sanguine, owing to expectations of relative economic stability, relatively favorable financing conditions and healthy corporate profitability," S&P's Diane Vazza said in the release.

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