S&P estimated U.S. junk default rate decreases to 2.33% in February

By Caroline Salls

Pittsburgh, March 2 - Standard & Poor's estimated 12-month trailing U.S. speculative-grade default rate declined modestly to 2.33% in February from 2.43% in January, according to a report titled "The U.S. Corporate Default Rate Declined Slightly In February To An Estimated 2.33%."

S&P said that more positive economic data in February continued to improve investor sentiment, which was evident in the equity markets' relatively robust performance so far in 2012, the more active primary market and the declining cost of capital, as measured by spreads.

The ratings agency said that sovereign problems persist in Europe, but the developments related to the second Greece bailout package in recent weeks decrease the uncertainty that has plagued the region for some time.

According to the report, two entities defaulted in February, including Tensar Corp. and Reichhold Industries Inc.

S&P said DirectBuy Holdings Inc. missed a payment in February, and Global Aviation Holdings Inc. filed for Chapter 11.

However, they were not included in the default statistic for the month because they were not rated speculative grade a year ago and, therefore, not included in February's estimated default rate.

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