S&P reports 0.89% near record low September global junk default rate

By Caroline Salls

Pittsburgh, Oct. 12 - Standard & Poor's reported that the 12-month trailing global corporate speculative-grade bond default rate fell to near record lows of 0.89% in September from 1.00% in August.

According to S&P, the default rate has been below its long-term 1981 to 2005 average of 4.61% for 32 consecutive months.

S&P said that, despite the recent decline, it predicts that the default rate will edge up slowly from its 2006 trough.

By region, speculative-grade default rates were recorded at 1.28% in the United States, 0.54% in Europe and zero in the emerging markets.

"As of Oct. 11, 24 weakest links remained vulnerable to default on combined rated debt worth $10.2 billion," S&P's Diane Vazza said in the report.

"This is one less than the 20-month high reported last month."

In 2005, S&P recorded 20 weakest link entities, while full-year 2004 averaged 31 entities.

From January through September 2006, a total of 17 defaults were recorded by S&P-rated issuers, affecting rated debt worth $5.7 billion.

© 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.