The agency said the default rate, which covers the prior year, dipped in November to 7.84% from 8.38% in October, according to Reuters. The rate stood at 9.77% at the end of 2001 and hit its peak of 12.4% in July 1991.
Defaults in junk bonds, rated lower than “BBB-minus” by S&P because of their risks, had been lingering higher this year than many experts had forecast. That was because of the struggling US economy, tighter credit markets, poor spending, and the number of high-profile corporate accounting scandals, Reuters said.
The US “investment-grade” default rate, which covers such companies as WorldCom Inc. that sank quickly into default from investment-grade, has reached 0.5% this year, surpassing last year’s 0.4%, S&P said.
S&P also said 57 companies, with $40 billion of bonds, remained in a shaky position, with credit ratings no higher than “CCC,” S&P’s fourth lowest grade other than default, and either a “negative” outlook or being on review for downgrade.