According to a Reuters story, the 12-month junk bond default rate is expected to end the year between 8.5% and 9%, S&P said. The record high was 12.42 % in July 1991.
Yet everything is not rosy in the junk bond world, S&P admitted. Some 53 issuers, largely in media, entertainment and telecommunications, remain in a shaky position.
Those “weakest links,” with $46 billion of debt, are rated “triple-C,” S&P’s fourth-lowest grade, or lower and have a negative outlook or are on review for downgrade.
According to Reuters, S&P listed as weak issuers:
- motion picture camera company Panavision
- wireless service provider Leap Wireless International
- magazine firm Ziff Davis Media
- television station operator Granite Broadcasting
The number of “weakest links” is down from the year’s high of 59 in January, S&P said.
“The lower number of weakest links supports the declining default rates and serves as an indicator that a moderate deceleration of defaults will continue through the rest of 2002,” S&P said in a report.
The US junk bond default rate surged last year to 9.72% because of a weak economy and less plentiful debt.
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