The latest example comes from Standard & Poor’s, which reported that 41 debt issuers defaulted on $31.3 billion of rated bonds in January, Reuters reported. Both figures set records for a single month – and included such high profile firms as Global Crossing and Kmart.
Not that the old records were all that old. It was only a month ago that the latest record was established – with 27 issuers defaulted on $25.3 billion of bonds, S&P said. Among these was energy trader Enron Corp., which has since gone on to find itself immersed in a growing swirl of controversy since seeking bankruptcy protection in December.
The January data come on the heels of last year’s record-setting default totals. S&P said 211 companies defaulted last year on $115.4 billion of bonds.
Among the higher profile January defaults, according to S&P were:
- Global Crossing Ltd., a Bermuda-based emerging telecommunications company with $7.6 billion of bonds
- Kmart Corp., a Troy, Michigan-based discount retailer with $3.8 billion. Both sought bankruptcy protection.
Defaults have surged in the last two years as economies worldwide slowed and access to fresh capital grew tighter. S&P said defaults will likely peak by the end of June.
S&P said 18 of January’s defaulting companies came from the United States, including:
· McLeodUSA Inc., a telecom from Cedar Rapids, Iowa
· Polymer Group Inc., a North Charleston, South Carolina-based fabric maker
· United Globalcom Inc. a Denver media firm.
Another 18 came from Argentina, following that country’s default on some of its own government debt, S&P said. The other five came from Bermuda as well as Australia, Britain, France and Poland.