January Junk Default Dip Won't Last: S&P
That was the sobering assessment from credit rating agency Standard & Poor’s (S&P) who warned that sluggish global economies and tight credit markets won’t make it any easier for some ailing companies to meet their debt obligations in coming months, according to a Reuters news report. Investors shouldn’t expect a “more perceptible improvement” until 2004, S&P said.
The credit agency said the 12-month global junk bond default rate fell to 8.33% in January from 9.2% in December. The US rate fell to 6.56% from 7.24%, while the rate for the European Union fell to 13.01% from 13.48%, it said.
Last year, more than $178 billion of bonds worldwide went into default, led by such issuers as WorldCom and Adelphia Communications. S&P said 60 issuers; up from 37 a year ago, have an elevated potential to default. These issuers, with $35 billion of bonds, have ratings of “CCC” or lower, and either have a “negative” outlook or may bit hit with a downgrade within three months.
You Might Also Like:
« US High Court to Define "Treating Physician Rule" in LTD Cases