Moody's global junk default rate eases slightly to 1.8% in November

By Caroline Salls

Pittsburgh, Dec. 8 - Moody's Investors Service's trailing 12 month global speculative-grade default rate fell to 1.8% in November from 1.9% in October, according to Moody's monthly default report.

Moody's said November's rate exactly matched its forecast from one year ago.

In the United States, Moody's speculative-grade default rate held steady at 2.0% in November from October, marking the third month at this level.

In Europe, the default rate edged lower to 2.5% in November from 2.6% in October. Moody's said this decline is not the result of fewer defaults, but more issuers in the denominator for November's rate.

Moody's said it expects the global speculative-grade default rate to fall to 1.7% by the end of the year, but to rise to 2.4% by November 2012.

"We recorded more defaults in November than in any other month in 2011," Moody's Albert Metz said in the report.

"However, on a year-over-year basis, the corporate default rate is closely tracking our baseline forecasts."

There were 10 defaults of Moody's-rated corporate debt issuers in November, including eight in the United States and two in Europe, bringing the year-to-date total to 31.

By dollar volume, Moody's global speculative-grade bond default rate remained unchanged at 1.6% from October to November.

The ratings agency's U.S. dollar-weighted speculative-grade bond default rate edged higher to 1.2% in November from 1.1% in October. In Europe, the rate came in at 3.3% in November, slightly down from October's revised 3.5% rate.

Moody's said it expects the highest default rates to be in the media: advertising, printing and publishing sector in the United States and the business service sector in Europe.

In the leveraged loan market, no Moody's-rated loans defaulted in November. The trailing 12-month U.S. leveraged loan default rate ended November at 0.8%, down from 1.2% in October, Moody's reported.

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