S&P blames rise in U.S. corporate defaults on continued financial market woes

By Caroline Salls

Pittsburgh, Sept. 2 - Standard & Poor's said the two U.S. corporate defaults recorded in August brought the year-to-date total to 50, a reflection of the rise in corporate defaults that has begun "as financial markets continue the malaise that began nearly a year ago," according to an S&P article released Tuesday.

According to S&P's article "U.S. Credit Metrics Monthly: Defaults Maintain Pace in August," relevant credit metrics within the United States show continued deterioration of credit quality, along with a prolonged contraction of new issuance and tightening credit conditions.

"Corporate defaults continue to rise as expected, with two U.S. defaults in August, bringing the year-to-date total to 50," S&P's Diane Vazza said in the article.

"This easily exceeds the combined 16 defaults in 2008 and 22 defaults in 2006."

Consistent with worsening economic and financial conditions in the United States, S&P said the number of upgrades in 2008 stands at 130, lower than the 165 reported a year ago.

Meanwhile, the ratings agency said downgrades over the same period are significantly higher, with 372 downgrades recorded through Aug. 28, compared with 246 in the same period of 2007.

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