| Add to balance / Manage account | User: | Log out |
| Prospect News home > News index > List of issuers R > Headlines for Ratings > News item |
Defaults drop to five-year low of 4.1% in March, Moody's says
New York, April 5 - The global speculative-grade default rate for corporate bond issuers fell to 4.1% for the 12 months to March from 4.4% in February, the lowest level in five years, according to Moody's Investors Service.
The rating agency is now predicting a rate of 2.9% at the end of the year and 3.0% for the 12 months ending March 2005.
"Improving fundamental credit quality continues to be the driver behind the year-ahead forecast of lower default rates," said David T. Hamilton, Moody's director of default research, in a news release. "As long as economic and high-yield market conditions remain favorable, default rates may reach lows over the next year not seen since the mid-1990s."
During March five issuers defaulted, four of them based in the United States and one in Canada. Together they accounted for $854 million of bonds.
The biggest was FiberMark Inc., which defaulted on $330 million of bonds, followed by Dan River Inc. with $157 million. The Canadian default was Hollinger Inc., affecting $120 million of bonds.
In total, the first quarter saw nine issuers rated by Moody's default on a total of $3.6 billion of debt. By comparison the first quarter of 2003 saw 23 issuers default on $11 billion.
The biggest default this year was RCN Corp. with $1.2 billion.
By region, seven of the issuers were based in the United States, one in Canada and one in the United Kingdom. That latter defaulter, Avon Energy Partners Holdings, is the only European issuer rated by Moody's to default since July 2003.
The speculative-grade default rate for U.S. issuers fell to 4.4% in March from 4.7% in February.
For Europe, the figure fell to 2.2% from 3.0% in February. A year ago it was 19.8%.
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.