Tags: S&P | Corporate | Default | Rate

S&P: Corporate Default Rate Lowest Since 2008

Monday, 03 Feb 2014 05:34 PM


The trailing 12-month U.S. speculative-grade corporate default rate fell to 1.7 percent last month, the lowest since March 2008, according to Standard & Poor’s.

The rate, which declined from 2.1 percent in December, will probably increase over the next few months, said Diane Vazza, the head of S&P’s global fixed-income research, in a statement from the credit grader.

There were no rated corporate U.S. high-yield defaults in January, making it the sixth month in 14 years without a default. There were 43 U.S. speculative-grade defaults in all of 2013 and 47 in 2012, New York-based S&P said.

The U.S. distress ratio declined to 5.2 percent in January from 5.3 percent in the prior month, above its low since the financial crisis of 5.1 percent in May 2013, S&P said. Distressed bonds are those with yields at least 10 percentage points more than similar-maturity Treasuries.

High-yield, high-risk securities are rated less than BBB- at S&P and below Baa3 by Moody’s Investors Service.

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