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Moody's global speculative-grade default rate climbs to 2.9% in July
By Caroline Salls
Pittsburgh, Aug. 9 - Moody's Investors Service's trailing 12-month global speculative-grade default rate came in at 2.9% in July, up slightly from 2.8% in June, according to Moody's monthly default report.
Moody's said the latest global reading exactly matches its forecast from one year ago.
"Corporate default rates have been holding steady at historically low rates, ranging between 2% and 3% for most of the past two and a half years," Moody's Albert Metz said in the report.
Four Moody's-rated corporate debt issuers defaulted last month, bringing the year-to-date number to 43, including 24 from the United States, 13 from Europe and the remainder from Latin America.
In the United States, the ratings agency said the speculative-grade default rate finished July at 2.8%, down from 2.9% in June. Last year, the U.S. default rate was 3.4% at the end of July.
In Europe, the rate held steady at 3.4% from June to July. A year ago, the European rate was also 3.4%.
Moody's said it now expects the global speculative-grade default rate to finish 2013 at 3% and to arrive at 2.5% in July 2014.
Across industries over the coming year, Moody's said it continues to expect default rates to be highest in the media: advertising, printing and publishing sector in the United States and the hotel, gaming and leisure sector in Europe.
By dollar volume, the agency said its global speculative-grade bond default rate came in at 1.9% in July, up from 1.8% in June.
In the United States, the dollar-weighted speculative-grade bond default rate held steady at 1.5% from June to July, and in Europe, the rate finished July at 3.2%, up slightly from June's revised rate of 3.1%.
Two Moody's-rated issuers defaulted in July in the leveraged loan market, both from the United States.
Moody's trailing 12-month U.S. leveraged loan default rate finished July at 2.5%, up from 2.3% in June.
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