March 1, 2012 / 6:36 PM / 6 years ago

TEXT-S&P: 2011 corporate speculative-grade default rate higher

 (The following statement was released by the rating agency)	
 March 1 - As we'd expected, the trailing 12-month U.S. corporate
speculative-grade default rate continued to decline in 2011, closing the year at
1.98%, said an article published today by Standard & Poor's Global Fixed Income
Research, titled "U.S. Corporate Speculative-Grade Defaults Totaled 29 In 2011,
Two More Than Forecasted."	
	
"The decline represented a drop from 3.3% as of year-end 2010 and is slightly 	
higher than our 2011 baseline forecast of 1.8%," said Diane Vazza, head of 	
Standard & Poor's Global Fixed Income Research. "Twenty-nine speculative-grade 	
entities defaulted in 2011--just two more than we'd expected." The first half 	
of the year was relatively good, with the U.S. economic recovery showing 	
increasing momentum and the improved credit market conditions continuing from 	
2010. However, the economy didn't grow as much as expected in 2011, and the 	
sovereign funding problems in Europe worsened as the year progressed, 	
increasing the risk of contagion in the U.S. 	
	
Moreover, other factors such as the heightened uncertainty in the Middle East 	
also contributed to the more pessimistic credit market conditions that 	
prevailed during the latter part of the year. The distribution of default 	
occurrences reflected this shift: 19 of the 29 speculative-grade entities that 	
defaulted did so in the second half of the year. "In 2012, we expect the 	
default rate to rise to 3.3%, with 51 issuers defaulting on their 	
obligations," said Ms. Vazza. For more details, see "The U.S. Corporate 	
Default Rate Is Forecasted To Rise To 3.3% In 2012," published Feb. 2, 2012, 	
on RatingsDirect on the Global Credit Portal.	
The report is available to subscribers of RatingsDirect on the Global Credit 	
Portal at www.globalcreditportal.com. If you are not a RatingsDirect 	
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 	
or sending an e-mail to research_request@standardandpoors.com. Ratings 	
information can also be found on Standard & Poor's public Web site by using 	
the Ratings search box located in the left column at www.standardandpoors.com. 	
Members of the media may request a copy of this report by contacting the media 	
representative provided.	
	
 (New York Ratings Team)	
 

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