Through June 11, 2008, 33 companies have defaulted, affecting debt worth $38.3 billion, said an article published on Monday by Standard & Poor’s.
The article, which is titled “Global Bond Markets’ Weakest Links And Monthly Default Rates (Premium),” said that this already surpassed the 22 defaults recorded in all of 2007 and 30 defaults in 2006.
Of the 33 defaults, 32 are domiciled in the US, and one is from Canada. The US also leads in the number of weakest links–entities that are closest to the default threshold–with 117 of the 140 entities (84%). The 12-month-trailing global corporate speculative-grade bond default rate increased to a 31-month high of 1.45% in May from 1.29% in April. The default rate has remained below its long-term (1981-2007) average of 4.35% for 52 consecutive months.
By region, the speculative-grade default rate increased to 1.89% in the US and held steady at 0.50% in Europe and 0.17% in emerging markets.
“Our mean baseline US speculative-grade default rate forecast is unchanged at 4.7%,” noted Diane Vazza, head of Standard & Poor’s Global Fixed Income Research Group.
