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High yield defaults rise to 6.1% in May, Moody's says
New York, June 19 - The U.S. high yield default rate edged up to 6.1% in the 12 months to May after bottoming at 5.8% in the 12 months to March, according to Moody's Investors Service.
However the number of companies defaulting fell to 325 for the 12 months ending May from 344 in the 12 months ending March.
Moody's also said that so far in the second quarter there have been downgrades to 65 U.S. high yield companies affecting $50.4 billion of corporate bonds and preferred stocks.
That means the second quarter count will exceed the first quarter's 64 but will likely be below the first quarter's dollar value of $96.2 million.
Both the count and dollar value are expected to be below the year-ago figures of 101 issuers and $136.2 billion of debt.
So far in the second quarter there have been upgrades to 25 high yield issuers, Moody's said. That compares with 43 in the first quarter and 23 in the second quarter of 2002.
By dollar amount, the upgrades are $34.7 billion so far this quarter compared to $22.4 billion in the first quarter and $5.8 billion in the year-earlier period.
In investment grade the 46 downgrades so far in the second quarter are improved from the 53 in the first quarter and 721in the second quarter of 2002.
But because of a $200 billion downgrade of an automaker, the dollar amount is already a record $309.9 billion of downgrades. By comparison, the first quarter saw $97.6 billion and the 2002 comparable period $227.2 billion.
Investment grade upgrades are 13 so far in the second quarter compared to seven in the first quarter and 12 in the second quarter of 2002, Moody's said. By dollar value the figures are $5.8 billion, $1.8 billion and $43.9 billion respectively.
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