S&P estimates 9.36% September U.S. default rate, first 2009 decrease

By Caroline Salls

Pittsburgh, Oct. 5 - Standard & Poor's said the U.S. speculative-grade default rate fell for the first time this year to an estimated 9.36% in September as more positive economic news emerges, according to a report titled "U.S. Credit Metrics Monthly: Default Rate Recedes In September."

Despite the projected decline in the default rate, S&P said credit metrics in the United States show continued deterioration of credit quality and restricted lending conditions, contrasted with signs of life among new issuance.

According to the report, the number of corporate defaults in 2009 slowed markedly in the United States in September, totaling eight during the month. S&P said this brings the year-to-date total to 155.

The ratings agency said defaults in September are attributable to five nonfinancial sectors.

"The preliminary estimate for the U.S. 12-month-trailing speculative-grade default rate in September is 9.36%, which is subject to revision," S&P's Diane Vazza said in the report.

"This is down from 10.4% in August and the first decline in the default rate this year."

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